Are millennials jeopardising their future every time they eat avo toast? The debate continues

Last week I wrote an article in response to an Australian property tycoon’s assertion that millennials would be able to buy houses if they stopped spending so much money on “luxury items” like fancy takeaway coffee and overpriced avocado toast served in hipster eateries.

Read more: Is avo toast standing between you and your dream home?

In order to make a point my argument was, I admit, a bit reductive.

And while we got a bunch of great responses from our users who identified with the seemingly impossible feat of getting a step up onto the property ladder, there were two emails, in particular, that I wanted to highlight.

Both users pointed out that it wasn’t fiscally ridiculous to sacrifice even small pleasures when saving towards a goal.

This is what they had to say:

Look after your pennies and your pounds will look after themselves

I came across your article today about avo toast and think that you have missed out on an important part of the argument.

Let us assume that instead of spending R3000 a month on avo toast and coffee, [Ed’s note: this is how much I worked out it would cost to have avo toast with a poached egg and 4 cappuccinos per day from Vida e Caffe, five days a week] millennials invest that money in an interest-bearing savings account.

Read more: Millennial entitlement is a myth

A fixed-term savings account at Capitec could get you about 8% interest. Now let’s also assume that the price of avo toast and coffee increases with inflation at 7% per annum and you adjust your savings accordingly. By simply saving this amount each month, a millennial could save R245,000 over 5 years – more than enough to pay a deposit on a more modest property (such as an apartment in Woodstock which one could get for R1.5 million, give or take).

As a 32-year-old who doesn’t own property, what I take from the avo toast argument is the importance of making wise financial decisions at an early age.

Yes, millennials may earn less than their baby boomer counterparts at the same stage in life – but blowing what money you have on avo toast, coffee and craft beer doesn’t help either. – Andre

Start as modest as you can – and work your way up

Hi there,

I would just like to respond on Lili Radloff's article about avo toast and properties. Well, I think she might have taken it to extremes. [Ed’s note: Indeed, I did]

There are properties where you don't have to pay bond costs and registration fees – they are called new developments and you can get them for less than R700 000.

I know because I bought one (or have a mortgage for one). You don't have to start with a R2.9 million house right down the road from where you work. Stay in a suburb that is a little further but where the houses are cheaper.

I know this, because I did this: bought a duplex for R450 000 in Benoni as I could afford the repayment. And the drive to Joburg’s CBD isn't too bad. Now I am renting out both properties and used that to get approval for a loan for an actual house (still not R2.9 million, but a lot better).

You have to start somewhere – so start low.

I am now a millennial with 3 bonds to my name that I am successfully paying off. It can be done... I agree that saving on your avo toast and coffee is not going to do it. But it is a start.... - Carisa

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