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  • Writer's pictureOpen Doors FP

Debt, Cost of Living, and Not Saving for the Future

The cost of living is one of the biggest expenses we face in our lives. Traditionally, families have a mortgage, maybe a car loan, and in terms of debt exposure, that’s about it. However, as America has moved away from being an industrial society, college is a must for many job paths in the career market. For most of us, that forces us to take on large college loans and lingering debt. What impact is this having on our future?

According to Education Data Initiative[i], the average tuition rate has grown 179.2% in total over the past 20 years since 2002, or an average of 9% a year. Since 1990, average tuition and fees have increased in cost by 130% after adjusting for inflation. In short, college costs have gone up much more than the general costs of goods (like groceries).

That means my income will reflect equal amounts of growth to cover higher college costs since it is required for my job right? Sadly, this does not seem to be the case. According to using info from the US Census Bureau, the US average income only grew by 4.62% since1975 annually to 2020. Adjusted for inflation that is only 0.94% a year on average. Compared to the average 9% growth for college tuition and fees, that certainly does not add up.

Below is a chart based on research done by Georgetown University Center on Education and the Workforce[ii] that shows an even grimmer outlook of income growth for those in their 20s (ages when we are starting out careers) vs college costs.

From personal experience, the other large contributor to the cost of living is rent. Most of us cannot afford to buy a house and take on a mortgage straight out of school. And as some in the older generations accumulate wealth and have more money to buy things, they and corporations are buying up homes as investments which causes home prices to go up even more. Not great for those who need a place to live and limited income. As a result, after paying rent, paying off student debt, buying groceries, gas, etc., there is not a lot of usable income left over.

So, after so much of our income goes towards paying our cost of living (student debt, car debt, any debt!, rent, groceries, gas, etc.), we are faced with the decision of should I save what little I have left, or live a little to enjoy life? In short, do I go to work, go home, and repeat each and every day so that I can afford to save for retirement and no play time, or do I go out with friends and find a reason to laugh, smile, and live my best life?

This is not an easy question to answer for younger generations. Based on conversations with clients, and talking with people in my community, people, in general, are not saving enough to retire on in the future. As pensions disappear and even Social Security is no longer a certainty for those of us who will not claim it for another 40 years or more, where will our money come from in our retirement? Do I work until I die? Do I die in poverty?

If you don’t know how your financial future looks, or how you will ever be able to retire, reach out to us on our contact page,, or email us at and we can work together to create a secure financial future designed specifically for you.


Open Doors FP


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