Rethinking financial goals after COVID-19 for young adults
Monday, 22 June 2020
It's not uncommon for young people to struggle financially when they're first starting out. However, the COVID-19 pandemic will likely make it even more challenging for many of them to embark on careers and become financially independent.
The majority of young adults is already feeling the financial pinch of the pandemic. Since many young people tend to work in service and retail jobs, those who were working no longer have jobs. Others who were in college got sent home and had summer jobs and internships cancelled. At the same time, those graduating from college are finding themselves walking out of their university and into a recession.
All this uncertainty has many young adults putting their previous career and financial goals aside as they adapt to this new reality. But there are some valuable steps these individuals can take to make the most of the current situation and also make plans to move forward.
Explore alternative work options
Whether you're just getting out of college, looking for summer work or entering the workforce right out of high school, finding your dream job could be challenging right now. But that doesn't mean there aren't opportunities.
Temporary jobs or “gigs" can keep some money coming in and give you the flexibility to look for work at the same time. Now that remote work has become more common, your job search isn't limited to your immediate geographic area. And if college wasn't necessarily on the horizon, consider going to trade school or other technical training, as skilled workers are in high demand and low supply.
If you can afford not to work at the moment, consider internships, volunteer opportunities or additional training that could make you more attractive to potential employers once they start hiring again.
Look into unemployment benefits
If you were working before the crisis—even if it was on a part-time basis—you could qualify for unemployment benefits. The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, extended unemployment benefits to additional groups of workers, including part-time and gig workers, which could allow you to qualify. Unemployment programs are run by states, so contact your state unemployment office to see if you qualify for benefits.
Make saving a priority
The COVID-19 crisis has made many Americans acutely aware of how important it is to have an emergency savings fund. And while saving is hard to do even when you are making money, it can seem impossible while you're struggling. But chances are your lifestyle has changed over the past few months—you're going out less, driving less, you've possibly even moved back home—which means you might have some extra money to set aside. Having a savings account could make life easier and give you more options as we emerge from the crisis. And, developing a savings habit early in life could make a big difference in the long run, too.
Be careful with debt
Having too much debt, regardless of what kind, can hinder your ability to save money, live on your own and get future credit when you need it. So, it's typically wise— especially when you are young—to avoid turning to relying on credit to get you through tough times.
If you already have debt, student loans or otherwise, try to make your payments on time and keep your accounts current. If you are unable to make your payments, contact your lender or bank to see if you can get a forbearance or change your repayment terms, even if just temporarily.
Protect your credit score
When you're just starting out, it can be hard to grasp just how important your credit score is. But if you're not careful now, in a few years when you can't qualify for the lease on your dream apartment because of your credit score, you'll understand. You'll also realize that credit scores are easy to damage but pretty tough to repair. Even though you might be struggling now, protecting your credit score should still be a priority.
You're not the first generation to get your financial start during a sharp economic downturn. Just ask the millennials. But working hard, being resourceful and making smart choices can help you get through this time and keep your financial goals within reach.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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