A recent study said that 35% of the U.S. workforce is millennials. Another article mentioned that this specific generation is more likely to put off life-changing events, unlike older age groups. They take a longer time to settle down.
Millennials are often described as lazy and are said to live with their parents longer than other generations. But the financial woes of this age group are also quite legendary. A recent study shows that the average personal debt of Gen Y is lower than Gen X, but the former’s student debt is crippling. This heavy burden is the reason why they defer forming their households.
This age group has higher educational attainment compared to their predecessors. They are more willing to take on a debt that they can barely pay to achieve this. They should get a reward for undertaking such a risk.
If you are a millennial, then you should listen carefully. You can get yourself out of the student loan hole far easier and far faster than your peers. Do you find this interesting? Here are adulting tips for you:
Payment Modification
If you are a fresh graduate, it is almost guaranteed that a big chunk of your salary goes to the payment of your student loan. If you find yourself unable to do so for a certain pay period, you should pay your credit card debt.
The NY Times published an article stating that the credit card debt is the lowest since 1989. This was accredited to the fact that millennials are not so keen on racking up the additional financial burden. If you find yourself in this position, you can use the money that was supposed to be for your student loan to pay off your utility bill.
Doing this will do wonders for your credit standing. Not only that, but you will also be able to get some relief from the financial pressure of multiple bills being due at the same time. You will save yourself from the emotional stress of seeing an unpaid bill.
Thinking About the Future
Let us say that you find yourself in the scenario described earlier. But this time around, you have already paid your other monthly obligations. In this case, you can use that extra cash for investment.
Before you think about house and lot packages or other real estate deals, you might want to consider non-tangible assets such as stocks. Investing in stocks is a great way to prepare for your future. You should also consider treasury bills and bonds.
Another way to prepare for your future is to take advantage of employer-sponsored retirement. If your employer is offering this benefit, they will match what you have contributed. What is even better about this arrangement is that this is tax-deferred.
Millennials often take employer-sponsored retirement plans for granted. It is a great way to save money for your future because your boss is paying a portion of it. One should never pass the opportunity of getting free money.
Contingency Plan
Another reason people rack up debts is an emergency. Putting up an emergency fund will help you during these times. It will also prevent you from taking out a loan. There might still be a need to take out a loan. But having an emergency fund will stop you from getting a larger amount to borrow.
Asking for Help
It would be easier on your end if you asked for help from your family in paying off your student debt. You must consider the fact that a student loan incurs interest. Paying the said financial obligation as soon as possible will stop the interest from compounding.
Being free from your student loan can take a big load off your shoulder. The feeling of relief should make you seriously consider asking for help from your loved ones. Other than the emotional reprieve, doing this will be a giant step to financial freedom.
The millennial is a highly underrated species. They are not only college-educated, but they are also street smart. They have adapted well to the times, leading them to choices that their parents would not have considered.
This age group does not only deserve praise for making prudent financial decisions. But they should also be given some break. They need professional guidance on how to deal with their student loan. Not only that, but they also merit help from their loved ones on dealing with this burdensome monetary issue.
