Are We All Just Living Beyond Our Means Now?

Claire Lampen · 2025-04-14T07:00:41.513-04:00

When Sarah first entered the workforce at 21, she was already in debt. Her sophomore year of college, one of her parents suddenly lost their job, and because her school used the family’s now-outdated financial information to calculate her “need,” she was denied financial aid. Sarah, whose real name isn’t actually Sarah, took out a total of $45,000 in student loans — $15,000 federal, $30,000 private — in order to finish her degree; she says she’s since paid about $60,000 on the private debt alone. “I loved my education,” she says. “I would never take back my experience or the friends that I made. But it royally fucked my future.”

With no full-time job lined up after graduation, Sarah took on as many freelance gigs as she could and moved in with a relative outside New York City while she looked for work. Barely able to manage the $150 monthly payment on her federal loan, she deferred on her private debt, causing the interest to explode. This marked the beginning of a punishing cycle that may sound familiar to millennials, who carry nearly 50 percent of the nation’s student-loan debt. When you take on staggering debt as a teenager, it becomes especially difficult not to accrue more of it. The cost of repayment and rent alone may cannibalize the bulk of an entry-level paycheck. Once Sarah found full-time work — paying $27,000 per year — she had to send around $450 per month to her creditors.

That sum ballooned with every pay bump she received, precluding any possibility of saving — putting her in a precarious position when, a couple of years later, a medical emergency landed her in the ER. She says the hospital confirmed it took her insurance, but an apparent administrative mix-up left her with a $20,000 bill. The only money she had to give them came from the pool she’d set aside to pay her freelance taxes; now, she owed not only her doctors, but also the IRS. With creditors looming on all sides, Sarah ignored the medical debt, praying she could run out New York’s statute of limitations. But the tax and student debt were always there and always growing. Although Sarah — now in her mid-30s — eventually managed to pay off her federal loan, she barely touched the principal on her private loan. In February 2024, her partner paid off the remainder of her student debt; sending him her freelance income, annual bonus, and tax returns, she’s already repaid him $10,000. “Had that not happened,” she says, “I think I would have died with this loan.”

But even as she has grown her career from assistantships to a senior-level communications position, she still struggles to square compounding debt against the demands of living in the painfully expensive city where her industry is centered, scrambling less to get ahead and more to stay afloat.

“Obligations come up,” Sarah says. “Your parent’s sick, you have to go visit them.” She also wants to be able to show up for the milestones — the bachelorette parties, the weddings, the baby showers — even if “the expense of it is intense” and even if it means putting the flights on Afterpay. Then there are the things she wants to afford herself: shopping for vintage clothing, seeing a movie, buying plants and seeds for her community garden, taking a $30 ferry to Sandy Hook beach as a treat in the summer. “Am I really going to, like, not live a life?” she wonders. “I’m in my 30s. I’m going to go on a vacation. I’m going to buy some things for myself. I’ve sacrificed so much for over a decade.”

There is this idea, entered into internet canon by a multimillionaire circa 2017, that millennials have sacrificed any possibility of future homeownership on the altar of avocados. We cannot control our discretionary spending, so we will never know the financial stability enjoyed by our boomer parents. But what of our commitment to the side hustle? We are the generation most likely to work multiple jobs, not because we share an innate love of entrepreneurship but because we inherited a grim economic reality. Many millennials, as well as members of Gen Z, need more than one income stream to make a livable wage. Sarah, for instance, manages two freelance gigs on top of her nine-to-six. “Never in my life did I think that when I was making six figures, I would need to have additional sources of income,” she says.

I didn’t leave college with debt, but like Sarah, I spent the first few years of my working life padding out a measly salary with side gigs. I graduated from unpaid internships to a career in notoriously underpaid industries, living in some of the world’s more expensive cities: first New York, then London, now Paris. Routinely spending more than I arguably should feels normal to me now, a fact of life in the vein of obsessively vacuuming up the clouds of cat hair that collect in the corners of my overpriced studio apartment each morning: maddening, but unavoidable. I don’t count on ever being able to buy a home on my own, less because I am frittering away all my money on brunch and more because the combined, ever-climbing costs of living — groceries, rent, health care, a trip to the pharmacy — devour the majority of my income, leaving very few crumbs. I know I should be sweeping these into my IRA, but what’s the point of moving to these places if I’m not going to get out and experience them? I’m not necessarily living within my means, but then again, I don’t know many people who are.

Right now, chronically overspending seems to be the default mode for many people. The United States may be teetering on the brink of recession, which — were it to happen — could be as devastating as the 2008 crash that happened during Sarah’s college years (at least according to some experts). Even workers whose inflation-adjusted earnings have consistently grown over the past five years may feel squeezed, because the growth isn’t enough to account for the rising cost of pretty much everything else. “People tell me rent and housing costs eat up half or more of their paycheck,” says Dasha Kennedy, the financial educator and activist behind the Broke Black Girl. “Child care feels like a second rent. Health-care costs come out of nowhere and wipe out savings. It’s a never-ending cycle.”

It seems impossible to me that anyone who is not already wealthy could be riding out this cycle of existential instability without at least a little white-knuckling through scarcity — but then I open Instagram. At some point over the last several summers, seemingly everyone I know started lounging along the Mediterranean (myself included). At home, at least according to my Explore page, they’re lounging on the same designer sofas. Silent luxury is out; power-shouldered, fur-coated Wall Street wealth is in. But are the boom-boom-aesthetic business boys comfortably absorbing the cost of all that Armani, or are the algorithms, having given us daily glimpses into the highly varnished lives of the megarich, pushing us all toward an unattainable lifestyle just as basics become unaffordable?

Online, “You can see someone on a boat. You can see someone skydiving,” says Kara Perez, the financial educator behind the sustainable spending platform Bravely Go. “That leads to these questions of, ‘What am I doing wrong that I can’t afford that?’ Or, ‘You know what, I deserve that. Let me figure out a way to achieve that’ — which usually means, ‘Let me put that on my credit card.’” If you see that the whole world has flocked to Europe, you may not rush to book a ticket, but you may do something small to give yourself an immediate dopamine hit — DoorDashing yourself an Italian dinner, for example, or buying yourself a swimsuit for future Sicilian sunbathing.

Adding to cart has become as second nature as reaching for your phone. And whether or not you’re trying to shop, scrolling can quickly turn into browsing, which can quickly turn into buying when your credit card is already queued up in your digital wallet. Social commerce pits all of us “up against a truly multibillion-dollar advertising machine,” says Perez. And once Trump’s tariffs kick in, whether you are budgeting for Shein or Ssense, it may cost us all that much more. “Nobody can say, ‘This is going to be going up from $5 to $12,’” Perez notes of expected increases. “That makes everything feel tenuous,” and it contributes to a lot of nebulous stress. Among her clients, “affordability is the No. 1 concern on everyone’s mind.” Perez doesn’t view discretionary spending as the main driver behind widespread insecurity. “Some people are overspending,” she grants, “and at the same time, we live in a very expensive country with a very high cost of living.” There is a reason why more and more young people are apparently relying on Afterpay and other “buy now, pay later” services to cover the cost of trash bags. For too many people, fixed expenses have gotten out of control.

Up until about 2017, Clara — a writer in her 30s — and her husband “were just barely able to afford” living in New York. Now that they have two kids, they spend $4,000 per month on rent and around $3,000 per month on child care, plus about $200 per week on Fresh Direct. Even though she and her husband are both earning more than they did when they welcomed their first child, the price of necessities has gotten so high that Clara — the lower paid of the two — has wondered if she can realistically afford to keep her job. “I have had this discussion with myself where I’m like, Would it make more sense to just stop working to save the cost of child care?” she says. “Do I need to give up everything I’ve worked for, just so this can make sense?” So far, her math suggests the money they’d save would be too negligible to justify the sacrifice, but as to how she and her husband are getting by: “We’re in debt.”

Across the U.S., household debt is mounting, and the Federal Reserve Bank of New York reported in February that Americans are not only taking out more loans but also having a harder time paying them back. You don’t need to squint to see why that is. Talking to my friends about money, one thing I have noticed is that regardless of socioeconomic background, regardless of existing debt or income or city of residence, everyone is feeling stretched. The differences between our income brackets — no longer decipherable based on who puts their card down when the bill comes and who’s thinking about buying a home versus who’s looking for roommates — are leveling out. Whether they are confronting interest on a mortgage or the fact that a meager “cost of living” raise can’t begin to cover the rent on an average one-bedroom, friends and acquaintances keep serving up the same logic: When world governments seem content to let the planet nuke itself, what’s the point in saving for the future? Spend on big experiences while it’s still possible to have them! See Venice before it sinks! You may be living beyond your means, but at least you are living.

Seductive as economic nihilism may be, however, the safer bet is to assume that the future will happen and that it will bring more moments of stress. While most economists would agree that in the chaos department, Trump is really outdoing himself with his trade war, “recessions are cyclical,” notes financial educator Tiffany Aliche, also known as the Budgetnista. Aliche and I spoke before “Liberation Day,” but she’s not wrong that expansion and contraction are an economy’s natural rhythms. The bright side: “If we’re down, it’s not forever.” She proposes taking note of the things you did that helped you save, as well as the out-of-reach items that would’ve made your life easier, and using the high times to stockpile for the inevitable lows ahead.

For millennials and Gen Z, however, those highs may feel elusive. Our tenure in the workforce has been marked by global crisis after global crisis, recession after recession, layoff after layoff. Acknowledging that pattern, both Perez and Aliche recommend talking to people about all of this stress. “Shame shields solutions,” says Aliche. The suggestion cuts against the traditional grain of financial etiquette, which says talking about money is rude. But discussing salaries is how we find out we’re being underpaid. Comparing prices is how we discover we’ve been ripped off. Publicly detailing the many ways in which systemic failures have combined to screw over the masses is how we may begin to force change. And while you can’t complain away student-loan debt or that 40 percent rent hike, you can at least crowdsource workarounds to muffle their impact, pool resources, or just find comfort in the fact you’re not alone. Eggs may cost $13, but talk? Just about the only thing that’s still cheap.