22 Jun Millennials Face a Second Once-in-a-Generation Economic Calamity
- Many millennials who entered the workforce in 2008-2010 remember all too well the challenges of finding gainful employment.
- Now, at a time when Millennials should be reaching the peak of their earning years, they face a historic downturn in the economy and job market once again.
- To survive and thrive in uncertain times, Millennials must preserve cash, shrink their budgets, and aggressively track and monitor their spending.
In 2008, as millennials entered the workforce, many found themselves unemployed and underemployed due to the Great Recession. Now, as many enter what should be their highest-earning years, they again face second once-in-a-generation economic depression due to COVID-19.
The early weeks of the pandemic eliminated the jobs of over 30 million workers within six weeks, with job losses continuing to increase even as the country begins to reopen. Limited capacity requirements, social distancing, and travel restrictions will continue to have an economic toll for the foreseeable future.
Whether you are among those now looking for work, or spent time working from home due to stay at home orders, you can take steps to not only survive the economic fallout of COVID-19 but to thrive.
Here are five tips for surviving and thriving in uncertain times
Convert to an emergency budget: When economic uncertainty occurs, you must rethink traditional spending. An emergency budget will help you stay focused on your most important financial goals and help you spot places to cut spending. You may need to make short-term sacrifices to stay on track with long-term goals.
If you do not use a budget to manage your money, now is a good time to start. NerdWallet offers a five-step approach to creating and following a monthly budget here.
Conserve cash to preserve savings: Cash preservation is important when you don’t know how long the financial crisis will last. You may be tempted to use stimulus money or a company bonus to pay down debt. However, during a recession, credit card companies frequently lower credit limits and close accounts to protect against defaults, making credit limits less reliable than cash-on-hand. In times of uncertainty, cash reserves are more valuable than lower debt levels.
Live simply: Avoid unnecessary spending and eliminate everyday luxuries you can live without. Carefully consider each expense and take measures to lower monthly costs. Conserving cash will help your savings last longer and enable you to survive without adding new debt to an already strained budget.
Ways to simplify your life might include decluttering your home and selling things you no longer want or need. You can simplify meals by cooking and eating at home. Simply living also embraces inexpensive entertainment options and focuses more on meaningful activities than costly endeavors.
Track everything: Use a spending app to track all your expenses. The better you understand where your money goes the more control you have over your spending. Apps make it easier to keep track of where you spend money, giving you the tools you need to find ways to cut back.
Use your resources: The internet provides resources to teach you how to budget, save, and invest your money. Other resources might include programs that could put a temporary hold on payments if you lost wages. Using current skills to maintain or increase your income. Seeking help from credit counselors or credit negotiation companies if you are unable to keep up with existing debt payments.
COID-19 might be a short-term financial challenge, or it could turn into an 18-month recession. Whatever comes, by taking proactive steps to shore up your finances, you will be ready for whatever the future brings.
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