By Bria Overs | Word In Black
(WIB) – In your 20s and 30s, you want to live in the here and now, kicking the can of longer-term goals further down the road.
But time flies when you’re having fun, as does mismanaged money.
Across the board, those between 24 and 34 years of age don’t feel certain about the future, according to a report by the AgingWell Hub at Georgetown University and the TIAA Institute. With the world’s current challenges, they just want to live for today.
“The first thing I noticed in the survey is that young adults seem to be quite optimistic about large global issues — climate change, addressing inequality, and activism,” Surya Kolluri, head of the TIAA Institute, says. “But those same young adults, when you ask about their financial situations, are less confident.”
Half of young Black adults from the same report don’t expect to do as financially well as their parents. And it makes sense. They reported living paycheck-to-paycheck while grappling with the current economy and feeling like their finances are in the driver’s seat of their lives.
The other half, however, actually expects to be better off.
“You know, my only goal is to not worry about money,” Collin Heritz, 27, tells Word In Black.
“I feel like, for so much of my life, I’m watching my bank account,” Hertz says. “In the back of my head, when plans are made for something, I’m thinking, ‘Do I have that money in my account? Or is that going to pinch me later?’”
Heritz has a master’s degree and thousands of dollars of student debt to go with it. He’s working a 9-to-5 job at a pest control company but says he’s not putting his degrees to work.
He’s just one voice for millions of Black people in the same position.
In the last few years, it’s become increasingly difficult for young adults to feel optimistic. However, they feel hopeful and confident in their ability to turn things around for their financial futures.
And financial professionals know how to help them get there.
What Living Paycheck-to-Paycheck Means for Their Futures
For Heritz, making paychecks stretch each month is challenging. On top of regular bills, some of which he splits with his girlfriend, there’s still the looming $500 a month student loan payment.
It doesn’t leave much for anything else, like savings. When asked if he could handle a $500 emergency, Heritz felt positive he could — with help from others, however. And saving isn’t the biggest priority right now.
That’s the case for many Black young adults. How do you find room for savings when barely making it monthly?
Only 33% reported putting aside savings regularly. The rest are either saving when they can or not at all because of debts and trying to make ends meet.
“When you look at those at or below the poverty line, and in the Black community specifically, there’s not a lot of confidence in our financial system, let alone the skill they have to navigate [it],” Markia Brown of The Money Plug says.
Brown, 30, is a Certified Financial Education Instructor, Registered Financial Associate, Credit Literacy Educator, and personal finance content creator. She teaches young adults what they need to know about financial wellness.
“It’s important that these young people understand that you can dream and be optimistic, but if you’re not properly planning to get to that point, it’s not going to happen,” she says.
Reaching Those Top Financial Goals
Despite lacking confidence in their current financial situations, Black and Latino young adults expect to be better off than their parents.
Growing up, Heritz says he watched his mom stress about money. A fate he’s hoping to avoid in his future.
These young folks have big financial goals to motivate them. Among the top of their lists are saving for emergencies, long-term goals or purchases, and retirement.
To achieve these goals, Kolluri says, young people must “check off the boxes” to achieve financial stability. If you’re living paycheck-to-paycheck, then you need to budget. Once a budget is in place and followed, there might be room to consider putting money aside for goals.
Paying off student loans, another impending obstacle, was at the bottom of the list for young adults collectively. However, Brown says, that’s likely to change with the axing of President Joe Biden’s student loan forgiveness plan.
“Student loan forgiveness isn’t coming, and a lot of people were really banking on that. And many people didn’t plan on having to pay their student loans back so soon. There’s a lot of financial insecurity with that.”MARKIA BROWN
Brown and Kolluri agree that the solution for helping young people and future generations is financial education and literacy. Brown believes giving youth guidance starting with their first jobs and in schools will make a difference in financial outcomes.
“If we can provide the right guidance, the right information, the right advice early on, hopefully we will set them on the right path,” Kolluri says. “I think we — journalists, financial researchers, policymakers, employers — all collectively owe it to the young adults to support them in understanding financial wellness and then how to navigate that to achieve security in retirement.”