Friday, September 11, 2009, AM | Leave Comment
Many Americans under 35 can’t manage the basic financial building blocks of an adult life, according to a survey of young workers published by the AFL-CIO. The union calls the last ten years a “lost decade” for these young people during which many fell short on critical responsibilities like getting their own place, finding a stable job with benefits and saving money for emergencies.
Some take issue with the suggestion that the current job market is more difficult for young workers than for their counterparts over 35. Employers may also assume younger workers are more tech-savvy and can more quickly adapt to a changing workplace.
Here are some tips for workers in Generations X and Y who are trying to start saving:
Cut your expenses
Cutting your expenses is the fundamental principle of personal finances. Without thinking, don’t spend just to keep up with your peers. By focusing your mental energy on one thing you love – and seeking out friends who share that interest – you may find yourself not spending money just for the sake of spending money.
It’s easier to save if you have a clear idea of what you are saving for. Choose to build up an emergency fund of six months’ worth of expenses or to put a down payment on a house, and each small amount you put aside will feel more meaningful. You will be able to save and save more if you don’t judge people based on their lifestyle and where they live in terms of their worth.
The easiest way to save for retirement
The easiest way to save for retirement is to take advantage of an employer’s offer to match your contribution to a 401(k). The money comes out of your paycheck automatically, and you are getting free money. You can also set up automatic transfers from your checking account to make building an emergency fund just as easy.
In a Nutshell
It’s crucial – those seven out of 10 young workers who don’t have enough savings to last two months – to start saving right away. Once you have established a saving habit, stick with it.