Generation Y, those born between 1977 and 1987, are mostly new to the career world, and are feeling the pressure of the recession. And while most people have experienced some financial squeeze in the current economic climate, Generation Y might be particularly vulnerable because of their weaker support system.
Most Generation X, baby boomer and older workers have the advantage of longer work histories, which have given them the time to build up larger emergency savings and retirement accounts. Gen Y, on the other hand, is more likely to be just starting out, and a large number are living paycheck to paycheck, according to a recent Met Life study. Nearly 75% of Gen Y employees are worried about their financial future, compared with 56% of Generation X employees and 62% of baby boomers. Generation Y is also less likely to have disability and life insurance than their older co-workers.
Building a Strong Financial Future
There are some simple steps young people can take to go from a shaky future to building a strong financial foundation.
First, start saving. Even if you don't have a lot to save, small amounts can add up over time. Begin with an emergency fund (aim to save enough to cover three to six months of expenses). This will give you peace of mind in an uncertain economy.
While you are adding to an emergency account, take advantage of your employer-sponsored retirement plan. Even if you're still building an emergency fund or paying off high-interest debt, it still makes sense to contribute to a retirement account – especially if your employer offers a match. Aim to contribute up to the amount needed to get the match, and try adding 1% every year thereafter.
Once you are contributing to a retirement account, then you can start looking at other investments. Meet with an investment professional at PeoplesBank for help selecting investments that are appropriate for you, and to learn how to position yourself for financial stability in the future.
Finally, it is important to protect what you earn and what you save. Disability insurance and life insurance may give you and your family the protection you need if something were to happen to you. Talk to your employer to see if it offers short- and long-term disability insurance. Life insurance can also often be purchased through your employer or a private insurance company.
Helping You Feel Secure
The economy can be scary, and Generation Y might feel that more than anyone. Our professionals can help you come up with a plan that will take the fear out of finances. Schedule an appointment with us today.