Are your 20s really the most expensive decade? No, they’re not
It was one of those conversations that just come up when you have coffee with a friend and you’re both self-employed. Kerry mentioned to me that a blogger had said on Twitter that your 20s are the most expensive decade of your life.
“No. Nooooo. Wait, what? Really?” I said, staring at Kerry in shock. Here’s the tweet:
— Bridget Eastgaard (@moneyaftergrad) January 5, 2016
Let’s all agreed that we all feel that we’re at the most expensive decade of our life – Gen Xers, you hear me, right? But to say that your 20s is definitively the most expensive I think is a fallacy. Let’s examine the most expensive moments in our lives: housing, school, children, retirement, health.
I’m going to look at StatsCan data and other surveys. Keep in mind that the StatsCan data is from 2008 and that data was collected before that. A lot has changed in the last eight to ten years. I can’t wait for the results of the upcoming long form census.
Average age of the first-time home buyer: 29 according to a 2014 BMO survey. Average spend: $316,000.
Average age of a Canadian post-secondary graduate: 24.8 years.
Average university debt: $28,000 according to the Canadian Federation of Students. This debt load contributes to the delaying of other actions like buying a home or starting a family so those expenses get pushed to later in life.
Average age for first child: late 20s.
Average cost to raise a child to 18: Moneysense says $250,000 (I rounded up a bit). The Fraser Institute says a maximum of $4,500 a year (that’s $81,000). I guess they’re not paying for daycare?
Average daycare costs: This varies by province and city so it depends on where you live. It ranges from $152 a month in Quebec to $1,700 a month in Ontario. Ouch.
So far mortgage, child and daycare costs are sitting in the 30s. Plus there’s that student loan to pay off.
And we haven’t even started looking at RRSP contributions and the lovely moment when you become a member of the sandwich generation (helping your parents and kids financially). That really drives up expenses.
If you’re thinking that these become affordable because wages generally go up as you reach your 30s and 40s, yes and no. Wages (if you keep your job) generally go up but overall, they haven’t kept up with inflation. This is why the recent federal election spent so much time reaching out to the Canadian middle class.
Life can be expensive and each decade brings its own set of expenses.