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For the love of God, millennials, you should be saving money

Vitalii Tiagunov / Shutterstock

Elite Daily is trolling the internet with a piece claiming that "If you have savings in your 20s, you’re doing something wrong." This, of course, runs against the conventional wisdom that people should be saving around 15 percent of their income throughout their careers.

The article, written by Lauren Martin, sets up bizarre dichotomy in which people have to choose between career opportunities and a social life or saving money in their 20s. But let's try to take this seriously, as opposed to as a simple act of trolling. A few thoughts:

1. One kernel of truth in Martin's argument is that there are times when spending money — even in seemingly wasteful ways — can make sense. For example, if you're in a career where networking is important, it may be smart to spend money to take full advantage of social opportunities. You might want to spend a bit extra to live near other young people in your industry. Taxi fares and bar tabs can be seen as investments in relationships that will pay professional dividends for decades to come.

2. But spending beyond your means on this kind of thing only makes sense for a limited period of time. For your first year or two after moving to a new city or entering a new profession, it might make sense to spend extra to help you become better connected. If after several years, you're still spending so much on your social life that you're not accumulating any savings, then something needs to give.

3. You don't want to get to your 30s or 40s and find you have no money in the bank. Seriously. And while your 30s and 40s — and kids, and spouses, and sick parents — may seem a lifetime away in your 20s, they are closer than you think. Sorry.

4. Martin, writing about her sad life before she had her no-saving epiphany, writes that "I was trying to save, which meant trying not to eat. I wasn’t going out with friends, had yet to go to a club and had never seen the inside of a taxi." This gets to a common misconception about how people get in financial trouble.

5. The problem usually isn't daily, discretionary expenses like cab fare or a bar tab. You can always cut those out when you need to. The problem is big-ticket, fixed costs. The biggest of these, especially if you live in a big city, is rent. If you can trim 10 or 20 percent off of your monthly housing costs — perhaps by getting a smaller apartment, moving to a less popular neighborhood, or getting a roommate — that can make a much larger difference to your budget than cutting out small-ticket luxuries like a morning cup of coffee.

6. That's why, when you look at the extreme early retirement community — the folks who stop working in their 30s — their secret is usually that they live somewhere super cheap.

7. American culture encourages people to behave like they're richer than they really are. Many people find it awkward and a little embarrassing to admit that the reason they don't want to go out is that they can't afford it. But that can lead to a bad equilibrium where everyone is spending more money than they want to. It's a shitty thing that we all do to each other without meaning to.

8. Luckily, this isn't actually a hard problem to solve, it just requires a bit of honest communication. Unless your friends are assholes, they're likely to be perfectly willing to come have a drink at your apartment instead of the bar. And there's a good chance they'll appreciate the savings as well as the company.