28 February 2020
As any 20 something having lived in the 2010s would concur, financial planning and money management is a critical skill to have in today’s day and age, perhaps more than in any period before. It’s a common belief that your late 20s are the most financially stressful years of your life. Which is partially true. There’s something that can be done by everyone to reduce financial stresses with good money management.
Over the years, increased population, inflation, and economy, it has become increasingly difficult to achieve, let alone maintain, financial stability. This is especially true for people in their late 20s as they are at the beginning of their careers. Many also take education loans for advanced studies or starting their own businesses. This is the first time people in their lives are earning a decent amount of money and are responsible for it, so it’s expected that they are naturally careless about it.
Another reason that these years are especially difficult financially is the rate of inflation and rising prices rarely ever matches the rate at which people’s salaries or paychecks are increased. A major portion of the newly graduated work in large corporations based in expensive metropolitan areas, which tend to increase their living and operating expenses by significant amounts, then say living in small towns where expenses tend to be frugal. An important factor here is also peer pressure and the burdens of social media. In today’s digital world, people are in a constant race to indulge in consumerism, often for the sake of perceptions. This lifestyle is especially appealing to the youth, but it doesn’t mean it’s financially responsible.
Credit cards also enable many to live beyond their means. They lead to unexpected debts though, and it’s important to remember that credit card debts are no joke. We’ve even done a dedicated post on their perils here. Interest rates on credit cards can be ridiculously high.
Another critical issue that merits a mention is the rising prices in the housing sector. The rates of properties have been on a one-way trajectory in almost all urban and metropolitan areas – again, the areas where a majority of graduated youth work. Buying a house in cities has become practically impossible even for someone with a very well paying job. It’s something on every youth’s mind, as owning a house is a standard by which the success of a person is still judged in society. All of these factors combine to make the late 20s a really stressful period in anyone’s life in today’s economic world.
However, with a little bit of help from a proficient financial planner or accountant, all of these things can be handled pretty easily. Here are some very important steps that people in their 20’s must follow to ensure financial freedom and independence for their future years to come.
In conclusion, the 20s are financially stressful, turbulent times. It certainly can be a fairly stressful and confusing phase. At the same time, it’s also a time of immense learning and growth, and an opportunity to be financially proficient is not one to be missed. Good luck!