Do Young Adults Face A Bleak Financial Future? Not If I Can Help It!
I don’t know about you, but I am getting sick of hearing about “doom and gloom” financial news.
From stock market/housing crashes, sky high consumer/government debt, poor job prospects and lack of retirement savings, what’s a normal person to do? Maybe scare tactics work, but I’m not buying it!
There is no doubt that today’s young people have a tough time and feel pressure on many fronts. But, there is also so much more we can be doing about it!
Mentoring and helping with education and career choices is critical. It’s hard for young people to choose what path to take and we need to help in every way we can. We should not judge by our own standards but, instead, support a choice that makes sense for them. Ideally, some combination of a career path that they enjoy, are good at and is in demand by the marketplace makes the most sense. Such a career will set them up for financial success and happiness.
Equally important, in my view, is to help young adults learn to make wise choices with their money. Developing smart financial habits at a young age, can make a big difference in the long run. One study, referenced by author Eric Tyson, indicates that children who get personal finance education save 5% more of their income. What matters most is how much money you “keep”, not how much money you earn!
One example of a smart habit is to begin saving money early and often. Not “rocket science”! I know you’ve heard this before but the reality is that many people of all ages don’t do it. More important than the amount saved is to make savings a habit! Even if you start small, you can always raise the amount over time. Make it easy for yourself by setting up an automatic, regular deduction on pay day from your chequing into your savings account. It will seem tough at first but soon you will adjust. You can also make it a habit to save part of your raises, birthday gifts, tax refunds etc. I encouraged my own kids to do this from a young age and they surprised me by saving more than I expected!
Enough about saving…its starting to sound like a lecture and I know that’s not helpful! But the truth is, that learning smart ways to handle the money you have is simple and empowering!
I look forward to sharing many more tips, and next time, will try hard to lose the lecture!