Financial Ruin: The Myth of Avocado Toast and Fancy Coffee
There is a surprising number of articles, blog posts, and videos advising young people to stop drinking fancy coffee drinks and consuming avocado toast: the reason: financial ruin. That’s right; people are making the claim that partaking in a beverage or a snack can ruin a person financially, which is not entirely true.
Obviously, most of these articles and statement pieces are using a bit of hyperbole to scare people into thinking more critically about their money, trying to encourage wiser investment decisions to curb the potential drain on the economy in the future. The problem is that the message is getting lost in translation.
Younger investors do not want to be told how to spend their money, and they certainly do not appreciate being chastised like toddlers. The problem with the avocado toast and fancy coffee messaging is that it is degrading and a bit over the top.
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Lost in Translation
When reflecting on the countless articles deriding the purchase of beverages and trendy snacks, one thing becomes clear: the point of the articles is to discuss budgeting and improved savings strategies. Unfortunately, because of the authors’ metaphor choice, readers feel like they are being ridiculed and told that they do not spend their money wisely, which is a problem.
Not all millennials are spending their money frivolously on so-called luxury items. What many finance writers seem to ignore is that younger generations are facing increasing financial hardships, from poor wages to fading career opportunities to crushing student loan debt. Despite many millennials having college degrees, there are not enough high-skill or white-collar positions to provide all individuals with jobs that fit their current educational level.
The primary issue for younger generations is not avocado toast or fancy coffee; it is a lack of opportunity. While many will argue that the country is currently experiencing a labor shortage, so there are plenty of jobs, the issue is in fair and equal pay. While many organizations have moved toward a $15 minimum wage, even that is no longer enough to keep low-skill workers out of poverty.
Budgeting and Control
For those with adequate employment, there is no reason they cannot enjoy a fancy coffee and avocado toast. Being successful financially is about establishing routines and savings strategies that fit within your income range. If you can afford to buy an occasional or daily coffee, go for it, as long as it is not taking away from your necessities.
As a younger individual, your goal should be to find a balance between your wants and your needs. The best rule to follow when starting is the 50/30/20 rule. 50% of your after-tax income is reserved for needs, like rent, utilities, food, etc. 30% is for wants, including fancy coffee and avocado toast. Finally, 20% should go toward savings and paying off debt.
If you are a younger individual or just like avocado toast and fancy coffee, ignore the myth of financial ruin. Partaking in a beverage and a snack will not ruin you if you have a solid financial strategy.
What are your feelings about the plethora of articles decrying drinks and snacks as financial pitfalls? Comment below.