Are Young Adults Struggling to Establish Themselves Financially? 

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  • 20% of Americans Age 18-24 Are Facing Financial Hardship
     
    CONSIDER THIS: A sluggish job market and rising debt levels have made it increasingly difficult for young adults to estalish healthy financial habits. With a lack of consistent financial edication, many young adults struggle to live within their means and manage their personal finances successfully.
     
     
    Is starting out harder than it used to be? According to Pew Research Center, 36 percent of young adults ages 18 to 31 were living in their parents’ home in 2012. They also report that only 63 percent of this age group had jobs in 2012, down 7 percent from 2007.
    In addition, a creditcard.com survey indicates young adults face significant debt challenges:
    • Young Americans (age 25-34) have the second-highest rate of bankruptcy
    • The average Ohio college student graduates with $29,000 of debt
    • Nearly 1 in 5 Americans aged 18-24 classify themselves as being in “debt hardship”
    How can young adults turnaround their financial situation? What steps can the next generation take to help turn the tide? Below are eight tips that will help young adults take steps toward a solid financial footing.
    Eight musts to start smart:
    1)       Open a checking account. Checking accounts help you manage your cash flow and budget. Two-thirds of Ohio credit unions offer fee-free checking accounts.
     
    2)       Build a credit history as soon as you can. Apply for a credit card and pay your bill on time. A record of prompt payment will help build your credit history, which will pay off when you apply for a loan.
     
    3)       Get insurance. Car and renters’ insurance help protect what you own.
     
    4)       Start building an emergency fund. It’s not a matter of “if” something unexpected happens. It’s a matter of “when.” Eventually your car will die or you’ll find you suddenly need a root canal. Ideally, you need to have at least six months’ salary saved. Start small - but start immediately - to build that savings.
     
    5)       Create a budget. Keep track of everything spent for two to three months so you know where your money goes.
     
    6)       Don’t forget retirement savings. You can always find a reason not to save. However, if you start now, the magic of compounding interest will be on your side. Put retirement savings into your budget from the start. If your employer offers a 401k, take advantage of it.
     
    7)       Exercise self control.  Consider the luxuries – even the small ones – before buying them. A 20-ounce bottle of water a day ends up costing you $365 a year. Packing your lunch could save you $2,000 a year.
     
    8)       Don’t put off student loan payments. Student loans don’t go away, and they accrue interest. Closely analyze your budget and cut back where can to ensure you can make the loan payments.
     

 

 

 

 

 

 

   

 


CONTACT:

Patrick Harris
Director of Public Affairs
(800) 486-2917, ext. 212
pharris@ohiocul.org

www.OhioCreditUnions.org