9 Financial Challenges Facing Young Adults
Hi everyone, thank you for coming back to my blog. I hope you found my last blog interesting and useful, where I covered ‘7 Ways Of Taking Back Control Of Your Finances’.
In today’s blog, I am going to cover the unique financial challenges that young adults are facing in the current economic climate. With entry-level jobs being much lower quality today than ever before and the ever growing likelihood that a recent graduate will be forced to endure a minimum wage internship than start at a healthy salary. It’s not an easy time to be a young adult.
Consider these financial issues and see how you can resolve them:
1. A lack of preparation for financial emergencies
Everyone needs an emergency fund. While the lack of an emergency fund is common within every age group, young adults are especially likely to not have any money set aside for emergencies.
2. Failing to take advantage of employer matching
If your employer offers pension contribution matching, take advantage of it. Not only will your money work for you, but your employer is giving you the same amount as what you’re investing. Considering future growth, your employer could be handing you a fortune — for free!
3. Becoming a homeowner
The rate of homeownership by younger adults continues to decline with each passing year. Before signing that expensive lease in the fancy apartment complex, think about the future. Downsizing today can mean homeownership in the future.
4. Becoming debt-free
Younger adults have more issues with debt than any other generation. The high cost of a university education and lower entry level wages are two of the primary culprits. An irresponsible use of credit cards plagues every age group. It’s easy to accumulate debt quickly.
5. A failure to plan ahead
Your 20’s and 30’s are an expensive time. This is when most young adults get married, go on a honeymoon, and have children.
Few can accommodate these expenses without a significant amount of planning and preparation. Avoid waiting until the last minute to prepare for your upcoming expenses.
6. Not choosing a university degree with employment in mind
Going to university has never been more expensive. While taking up a degree in art history (no offense to those who have done this/are doing this as a degree) or the trombone might sound intriguing, there are few employment opportunities within these fields. Consider the future when planning your university years.
7. A failure to save for retirement
It’s common to think that you’ll have plenty of time in the future to save for retirement. All those 65+ year olds you see working in fast food and retail thought the same thing.
Get in the saving habit early in your career. Over time, your investments will grow to fund an enjoyable retirement. Start early enough and you might be able to retire years early, too!
8. Failing to create and follow a budget
Whether you earn minimum wage or £1 million per year, you need a budget. A budget is a great way to limit your spending and make yourself aware of your financial situation on a monthly basis.
9. A lack of education
It would be difficult to find a topic covered more thoroughly than personal finance, yet people still lack financial literacy. Buy a popular finance book or two, whether it’s about budgeting, saving money on taxes, or making the most of your investments. All the information you need is readily available.
Here are my personal recommendations to get started :
Young adults face many financial hurdles that grow taller each year. Now is the time to create a budget, plan for the future, and embrace a little austerity. Suffering a little today can result in a bright future. Taking it easy today ensures a challenging future. The choice is yours.
Until next time, stay safe and please share this blog with anyone who might find it useful. Thank you.