The Financial Obstacles Facing Young People Today
More and more people face difficulties.
Even before the pandemic hit, you couldn’t pick up a newspaper or listen to a bulletin without reading or hearing about financial pressures facing young people. As more and more people face difficulties, we’ll take a closer look at the obstacles posing problems.
In recent years, there has been a surge in the number of young people returning to their family homes to try and save money. Figures suggest that 52% of young adults in the US are currently living with their parents. In most cases, the primary motivation is cutting costs, with many unable to afford to rent or buy. Renting often involves sharing with a number of others or taking on an expensive lease if you want your own space, and once you’ve factored in living costs and bills, it becomes increasingly inaccessible even for those who have a full-time job. For those who don’t have the option to move home, there are ways to save on living costs. Sharing with friends, considering cheaper, up and coming areas and offering to take out a long-term let could all bring costs down. It may also be worth looking into all-inclusive offers, which cover bills, as they may offer better value for money.
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Getting onto the property ladder
Most of us are programmed to follow a set path, which often involves going to school, studying or finding a job, buying a house and settling down. While there’s nothing wrong with deviating and doing your own thing, many of us do want to get onto the property ladder. It has become increasingly difficult to make that step, and this is largely due to the fact that you need to put a significant sum of money down to secure a new home. If you’re struggling to pay bills and cover rent as it is, saving for your own house can seem like mission impossible.
If you are looking to buy your first home, it’s worth exploring initiatives and programs that may be available to you to help you get onto the ladder, and you could look into ways to make the acquisition more affordable, such as taking out a mortgage with a partner, sibling or close friend. It’s also incredibly beneficial to try and save as much as you can before starting a property search. If you can clear debts and put money aside, this will improve your credit score and open the door to better borrowing terms. It’s worth noting that many mortgages have a fixed rate for a period of time at the beginning of the term. Once this period elapses, you can seek advice to get the best rates for home loan refinancing. This can lower your monthly outgoings, freeing up more money to save, pay off credit cards or cover household bills. Before you apply for a home loan, take the time to research, find out about schemes for first-time buyers and ask for professional advice.
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Steering clear of debt
Research suggests that young Americans owed $1 trillion in 2019. With economic uncertainty permeating the air and young people affected by job losses, this figure could rise significantly in the months ahead. For many people, it’s becoming harder to pay bills and keep a roof over their head, and this isn’t due to living a lavish lifestyle, but to a gap between incomes and living costs. If you’re paying rent on top of electricity, broadband and insurance bills and you commute to work, your wages may have gone before you even think about buying lunch or replacing an old pair of shoes or work trousers. Steering clear of debt is a challenge many face, and often, there are no easy ways to stay in the black. Once you start to struggle, it’s also common to add to existing debts, with many using credit cards and loans to get by. The problem with this type of debt is that it can spiral rapidly due to high interest rates and charges. If you are worried about your debts, or you’re struggling to see a way out, there is help available. You can talk to debt advisers and financial experts who can offer recommendations and go through options with you to help you clear debts, reduce payments and get back on track.
Young people are facing unprecedented financial challenges. For many, renting is not affordable, it’s impossible to get onto the property ladder and it’s increasingly difficult to get out of debt. If you are worried about money, it’s crucial to understand that help is available.