No matter who you are, or where you live, your twenties can be tough. It’s a decade of establishment—in your career, your personal relationships, your priorities. It’s the time when you’re supposed to figure out what work really means to you and the role it should play in your life (you know, that elusive work/life balance). But priorities can change quickly, and finances take a hit all too often. Thankfully, ONE37pm is partnering with Intuit to shine a light on five of the most common financial roadblocks twenty-somethings face in the hope that awareness of these issues will help change your whole outlook.
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5 Financial Hurdles You Might Experience in Your 20s
1. You Don’t Have a Mentor or a Financial Role Model
As the modern office evolves and remote jobs continue to increase in popularity, one major downside for those fresh into the workforce is the decline of professional mentorship opportunities. According to a new study by Intuit called The Pursuit of Prosperity, nearly 50 percent of Americans claim they didn’t have a financial role model growing up. Of all the hurdles on this list, this one might be the easiest to correct.
Whether it’s a paid professional, a trusted colleague or simply a peer in your community, identify someone whose financial outlook you admire and reach out to them. Ask them how they got started on their saving journey and what kind of ideology they have. Think about these conversations as gathering information—the more information you have, the better decisions you’ll make. Honesty and transparency, carefully dispatched, can illuminate new pathways to success.
If speaking to a professional seems too stressful, let technology help bridge the gap. For example, Intuit’s TurboTax Live lets you connect live via one-way video technology with a CPA or enrolled agent with an average of 15 years of experience.
2. You’re Living Paycheck to Paycheck
This year, Intuit’s Pursuit of Prosperity study found that nearly all Americans (87 percent) believe meeting financial goals is key to achieving prosperity. But the challenge of managing finances creates tough situations. A measured 44 percent of Americans admit to not having any money in a savings account. It’s clear: Good savings habits can be hard to form.
In order to improve, it’s important to be realistic. What’s the primary reason you haven’t been able to save? Spend some time looking at your credit card statements and your cost of living, then compare them to your salary. Once you’re being honest with yourself, pick a broad saving idea and put it into practice. Try it for a month, then reassess.
3. You’re Not Using Services to Monitor Your Spending
Speaking of saving, with the surfeit of financial service startups flooding the market, it can be confusing to figure out which ones are right for you and your financial goals. (Robots are investing for me? I have so many questions.) Our advice? Start simple.
Free apps from Intuit like Mint and Turbo provide user-friendly solutions that present your financial information in clear, accessible ways. If you’re looking for a visualization of your day-to-day spending, Mint is a great tool that connects easily to your spending information. If you’re interested in taking charge of your financial health and tracking your debt-to-income ratio, credit score, verified income and purchasing power, Turbo is a great option. Both are free and require minimal effort to get started.
4. You’re Not Taking Advantage of Work-Sponsored Programs
Listen, any kind of financial paperwork is annoying. It can be comprehensive and feel invasive, and there may be decisions you don’t feel informed enough to make—like what mutual funds to pick or which stocks to invest in.
But if your employer has a sponsored 401(k) or IRA program, enroll as soon as possible. If your company has a match program, which it likely does, it’s free money. Don’t be intimidated by the paperwork, because you can always change your portfolio selections down the line. And if you’re still uneasy, talk to a professional or your mentor about it.
5. You’re Not Paying More Than the Minimum on Credit Cards
While none of the items outlined in this article are hard-and-fast rules, here’s something that’s fairly rigid when it comes to financial health: Don’t buy stuff you can’t afford.
Additionally, don’t just pay the minimum on credit cards. A common myth is that leaving a balance on your account can help build your credit score, but that’s just plain false. Pay that thing off every month. No ifs, ands or debts about it.
Click here for more information about Intuit’s Pursuit of Prosperity study, and join the conversation online! Share thoughts on your pursuit of prosperity with the hashtag #ProsperityForAll.