In Their 20s, Struggling to Save and Tired of Being Lectured About It

Shea German-Tanner tries to put a portion of her paycheck, even if it is only $50, into her savings account. But most of the time, she has to reroute the cash back to her checking to afford her expenses. Ms. German-Tanner, 22, has about $600 in her savings account right now and has not started saving for retirement.

“Everyone’s telling you to save money and do this and invest, and I feel like I can’t do that because I’m living paycheck to paycheck,” Ms. German-Tanner, a social worker in Fort Wayne, Ind., who makes about $40,000 a year, said. She said she feels as if inflation has impeded her ability to save money.

Young people who are just starting to get their footing as they enter adulthood are grappling with how to balance their incomes and spending priorities so they have money left over to save for emergencies and retirement. Worrying about saving has always been hard for 20-somethings who begin their careers at the bottom of their earning potential. But saving is especially difficult right now because on top of paying off student debt, housing and food costs remain high even as inflation has started to cool .

Ms. German-Tanner said that 20-somethings are often encouraged to take financial steps like build emergency funds, save for retirement and pay off debt. They’re advised to invest when the market is down and to start thinking about their futures as early as possible. The FIRE movement (an acronym for “financial independence, retire early”) has been glorified in recent articles, and videos about budgeting and saving in Roth IRAs have taken over TikTok .

“I feel like the older generation is constantly pushing you to do stuff like they did when they were in their 20s, but it’s not even comparable to when they were in their 20s,” Ms. German-Tanner said. Ms. German-Tanner tries to put part of her paycheck, even if it is only $50, into her savings account. She has about $600 in that account and has not started saving for retirement. Theresa Fairless, a 25-year-old project manager in Aberdeen, N.J., said paying off student loans has been her priority. Ms. Fairless graduated from college in 2018 with about $25,900 in government loans and $50,000 in personal loans. So far, she has paid off all her personal loans and has about $23,000 left to pay off in government loans because she has not been making payments during the student loan pause period.

“I was the first person I knew who had to deal with loans,” Ms. Fairless said.

She has lived at home since she graduated, and recently moved in with her boyfriend to an apartment nearby, but he is paying a larger share of the rent than she is because he makes more money. Ms. Fairless, who makes about $65,000 a year, also gives money to her mother each month since her father died recently and her mother does not have savings.

When Ms. Fairless was living at home, she gave her mother $300 a month. Now, she gives her $200. She also saves about $160 a month for retirement in a 401(K) plan, puts $100 in a stock portfolio and tries to save from $50 to $200 in a savings account.

“I always wanted my emergency fund to be at $10,000,” she said. “I have it there and I feel like I need it to be more. I honestly feel like I’m not just saving for myself — I’m saving for my mom because I know she doesn’t have one.”

For Thea Pham, a first-generation Vietnamese immigrant, sending money to her family is also a priority. Ms. Pham, 27, is married and lives in Los Angeles with her husband. Ms. Pham works in finance and was unable to disclose exactly how much she makes because of regulations around her job, but she said most people in her position earn from $160,000 to $250,000 annually. She also has a TikTok account with more than 450,000 followers, where she posts about mental health issues. Ms. Pham acknowledges she has achieved financial stability, but said she does not have the flexibility to spend like friends with similar high incomes because of cultural expectations that she has to support her family in Vietnam.

“The majority of my paychecks are actually sent home to my family,” Ms. Pham said. “I didn’t know Americans don’t do that and how abnormal it is.”

Ms. Pham said most of her husband’s paychecks go toward paying their housing and living expenses, to which she contributes up to […]

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