Common Financial Problems that Young Adults Face

If you are a young person, then you are relatively new to financial responsibilities. Having to handle such responsibilities, especially when you may be unsure of them, can be stressful. When you learn about common financial issues that many young adults face and some helpful solutions, you can be more prepared to face them.

Student Debt

This is one of the most significant financial difficulties that almost every student faces. University and college can cost hundreds of thousands of dollars. As a young adult, you will not have a lot of your own money saved up, even if you have worked for a few years. Some students receive financial help from their parents, yet this is not a possibility for every student. Although it may not be a considerable worry while you are still in school, it will cause a lot of anxiety once you are completed. 

Solution: You obviously cannot escape from student debt, yet you can alleviate its stress. Recognize that millions of students like you have the same debt. You do not currently have the funds to pay off the debt, yet you can create a plan to pay it off.

Financial Illiteracy

Most students are not taught financial literacy in school, which confuses them when they become young adults. From this, many may unknowingly make financial mistakes, such as getting into bad debt. This can damage a credit score and ultimately make your future financial life challenging to repair.

Solution: Even if you are not well financially educated, you do not need to worry. 

Paying For Rent

In recent years, rent has gone up quite a bit. This makes it strenuous for young adults, who may not have enough of an income. The sad reality is that rent may take up most of your incoming paychecks. Everyday living and working towards saving ultimately becomes very difficult. Young adults may feel like they cannot work on their future goals, as their rent is holding them back.

Solution: Being in this situation may seem like you have no control over your finances. Yet, the key is to make small steps towards moving forward financially. If your rent is very high, consider other areas in your life that you can budget. This can include eating out and recreation. Put this towards your savings. If your rent is taking up over 80% of your income, then it may be beneficial to find another rental. This way, you can successfully save, which can help you get a mortgage in the future. 

Having No Insurance

Insurance is something that many young ones do not consider. They may believe that it is more important when you get older and that nothing terrible will happen. The truth is that something can happen at any time, such as a medical or house emergency. Not only will a situation like this become more stressful to deal with, yet it will cost you much more as well. 

Solution: Take the time to evaluate what insurance you may need to be covered. This can include life and medical insurance. With this insurance in place, you can rest assured that you will get property assistance and have it covered in case of an emergency.

The bottom line is that young adults will face these challenges. Dealing with these challenges can be overwhelming when you do not have a plan set in place. Finding the right solutions that work for you personally is what is critical. Keep in mind that although these financial problems seem impossible to deal with, you will gain more financial skills and assets as you get older.

If you have any questions or concerns about common problems young adults face, please reach out to us!

Sources

-Fontinelle, Amy (2021). The Biggest Financial Hurdles Young People Face. Investopedia. Retrieved from https://www.investopedia.com/financial-edge/0712/the-biggest-financial-hurdles-young-people-face.aspx

-Finura (2020). Six Financial Problems Facing Today’s Millennial Generation. Retrieved from https://www.finura.co.uk/news/six-financial-problems-facing-todays-millennial-generation/