In today’s world, young people are facing challenges in planning their financial futures. Many lack formal education in managing their finances and assume that it is something they’ll just understand one day. Young people in Ireland today need to start saving to be ready for the future. Here are the top four challenges that recent graduates or college students have in their path towards financial freedom.
Low Financial Literacy
Many young people think money and financial skills are something their parents or other adults just have. They don’t know that financial literacy is actually a skill that can be learned. Financial literacy is rarely taught in schools, so young people have to take the initiative. They have to learn how to budget, manage their credit or debt, and how to invest on their own.
There is so much information available, and it can be hard to know where to start. Low financial literacy can lead to stress and frustration when being financially independent for the first time. Luckily, even a few minutes a day is a great way to start learning personal finance management.
Managing Debt and Finances
Unfortunately, debt is an extremely common area of many young people’s lives. Whether that is student loans or consumer debt, it accumulates quickly and silently. Sudden life events and poor money management skills can exacerbate this along with the shift in society towards extensive consumerism.
Understanding credit policies comes with understanding finance and money, so a lack of the above tends to aggravate the other areas. However, this means an easy solution is building your financial literacy skills and implementing a budget.
Increasing Prices and Cost of Living
In the last 50 years, costs have risen immensely and young people often feel the brunt of that change. Generally, those in their late 30s to 50s are in their financial prime. They have high-earning incomes and years of experience under their belt. This can be daunting as a university student or recent graduate with a lower income but understanding your money management and taking control of your income and spending is a great way to start.
This is why starting early is so important. Learning to invest and save at a young age will help set you up for a successful future. You can also be sure to maximize your earning potential by turning a hobby or skill into another income stream.
Financial Uncertainty
If the COVID-19 pandemic taught us anything, it’s that nothing is guaranteed. Life can change drastically from one day to the next with almost no warning. This is worsened by uncertainty surrounding environmental and other global issues. The constant innovations mean that industries are changing each day and causing career uncertainty.
This is causing a shift from saving towards spending. Although increased consumption is not necessarily bad, the past few years have taught us that it’s important to be prepared. This means saving for the future to be ready and able to feel financially stable in retirement.
In order to be able to save and set themselves up for financial success, young people have a seemingly impossible task. They have an overwhelming access to knowledge while simultaneously a lack of financial understanding. On top of this, there is growing debt and general uncertainty, and increasing costs. This is why starting early will set you off on a successful financial future and to overcoming these financial challenges.
How a Financial Advisor Can Help
Young people face a great deal of uncertainty in not only finances but also with living and career prospects. One way to overcome these stresses is to take control of your finances. Lowering unnecessary spending and increasing investments and savings will help to dissipate stress levels so you can enjoy life. We help our financial clients to view, manage and optimise their current spending and create effective financial plans so you can take control of your finances.
Get in touch and speak to our financial advisors today to learn how we can help you.
