EDITORIAL: Younger generation must save now to prevent future struggles
Possible crisis puts puts pressure on young people
Many of the same economic faults that predicated the 2008 crisis have returned.
“Economic forecasters keep pointing to an increased possibility of a recession. JPMorgan Chase warned last week that the probability of a downturn over the next 12 months has climbed to 40%. Bank of America says the odds of a recession next year are greater than 30%," according to CNN.
With the chances of an imminent downturn evidently increasing, college students must be wary in order to not slip into a similar situation that the millennials did.
Millennials, usually defined as being born between 1980 and the mid-1990s, came of age during the 2008 crisis. Some were a few years removed from college, while some were college-aged. The damage that entering the workforce during the nation's second-largest economic crisis still shows.
An article from The Atlantic highlights the economic struggles faced by the younger side of the nation's workforce. “But the fact that young people are buying fewer houses and cars doesn’t prove that they want fewer houses and cars. It might mean they simply can’t afford them. That latter conclusion is now supported by research from the Federal Reserve,” the article stated.
Younger people from elder generations — such as the baby boomers or Generation X — made more money at this stage of their lives than millennials currently do, according to the article.
The 2008 crisis clearly had a negative impact on the young, and if the crisis widely being predicted now is severe, Generation Z may be in for a similar ride, putting even more value on tight, financially sound budgeting tactics.
Young people in general tend to have difficulty saving practically. Many are tied into college life, which generally comes with erratic expenses that vary wildly from month to month. This makes crafting a consistent budget difficult, if not completely useless, as many expenses during young adulthood are sprung upon consumers, and not planned.
Furthering the difficulties of budgeting while young are income sources. Many middle-aged workers have a career job, one that remains consistent year to year. With that comes consistent salaries, benefits and other compensation.
On the contrary, younger people tend to work part-time, often moving between several jobs seasonally. This also causes inconsistency with pay, hours and variable expenses, causing more strain when planning finances.
Additionally, many college-aged people have finances tied in with their family or guardian, giving them less control over their money. This also makes budgeting difficult.
Despite these unfortunate truths, there are plenty of ways for younger people to make wise financial decisions. College debt is a bubbling crisis that will impact millions of young people, so conserving what income they do have is a critical way to start their independent life on the right foot.
At the very least, it is important for everyone to make the best of what they do have, no matter how little that may be. Simple price conservation tactics dealing with everyday items may seem inconsequential in the long run, but over time, the savings add up tremendously.
Easy things, such as switching from a brand name product to a generic, can preserve money without impacting quality of life in any serious way.
For students, many banks offer student accounts that waive particular fees, which can also add up over time. Spotify, a music service used by many of all ages, offers a student package that includes other services for a low rate.
Some money-saving tactics do not even occur to students. Foremost, upper-education — whether that be undergraduate college, graduate school or trade school — is likely the greatest expense for younger students.
Finding ways to mitigate the toll education takes is critical, whether that be changing from living on campus to commuting, lowering or eliminating meal plans and taking public transport when possible.
Many of these suggestions may seem superfluous, inconsequential or silly as you read them, but remember where a college-aged individual currently stands.
They have not experienced a legitimate economic downturn since they were children, when they were likely too young to fully comprehend what was happening. They do not know what it is like to live during a recession, and the potential fiscal sacrifices that accompany it.
At the end of the day, small changes in lifestyle could put you ahead of your peers financially and help provide a cushion in the case of an economic downturn.
Additionally, regardless of how the world economy fairs in the future, learning sound financial habits at an impressionable age will set you up for the rest of your life, and leave you feeling prepared and secure in the case of recession.
Either way, the fate of our generation's finances rests on our ability to save. In order to spare ourselves the fate of the millennials, it is important to start stashing away now.
The Daily Targum's editorials represent the views of the majority of the 151st editorial board. Columns, cartoons and letters do not necessarily reflect the views of the Targum Publishing Company or its staff.
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