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Handling financial challenges as a young American

Gen Z and young millennials find themselves in a tough situation given the economic effects of the pandemic. At this age, your parents and grandparents were likely hitting milestones like getting married, having children, and buying their first house. It’s valid to feel like you’re running behind, but you’re not alone. We’ve put together some reasonable steps that may help address your concerns.
Sep 7th 2022
4 min read
Learn how to handle financial challenges if you're young.

Dealing with the high cost of renting

Although the price of rentals may feel overwhelming, there are options to consider. You may want to ask yourself if you qualify for rental, utility, or phone assistance.

There are many government programs that might help you with these costs, like the Lifeline program which provides a discount for phone service.

Another option is to see if there are any income-based rentals in your area. Every state is different, but the Consumer Financial Protection Bureau (CFPB) has a lot of great information about rental assistance to start you off.

The U.S. Department of Housing and Urban Development (HUD) also divides renting information up into states for things like rental assistance and subsidized apartments.

 

Trying to buy a home?

When it comes to the cost of homes, things might seem hopeless, but we encourage you not to give up. There are some options that may help you save if you’re looking for your first home.

Consider checking your state’s first-time home buyer programs. The HUD website provides a great jumping off point for learning about affordability, homebuying programs, and more.

If you have lost (or are at risk of losing) your home:

Please consider looking at the following resources:

  1. Continuum of Care (CoC) Homeless Assistance Program
  2. Avoiding Foreclosure (HUD)

 

Handling the burden of student loan debt

Do you have federal student loans, or private ones? Either way, there are some steps you might consider to ease some of the burden you’re feeling.

Federal Loans

If you have federal student loans then you’ve likely seen the studentaid.gov website. It might be worth exploring more if you haven’t already. There are many helpful tips for navigating your loans and finances.

If it’s time for you to start paying back your loans consider the following options:

  1. Pay more than what is due each month. That extra money will be applied to the principal, which means you’ll pay more towards the loan itself rather than in interest.
  2. Your federal student loans might qualify for forgiveness if you meet certain requirements, such as working in public service, or in other life circumstances like if you become disabled.
  3. An income-driven repayment plan (IDR) might offer a more manageable monthly payment based on your income. There are four different plans to choose from, so it’s recommended you look through your options carefully.

Private Loans

Like federal loans, you may be able to pay more than is due each month to help bring down the principal, if that is within your budget.

If you have more than one loan, consider paying off the highest interest ones first. Or you might want to see if you can refinance or consolidate those loans to bring down the interest. This will be specific to the loan servicer you have.

It might also be worth giving your lender a call and asking about any deductions or discounts you could take advantage of. For example, many offer a discount for setting up auto-payments. This could also apply to other monthly bills, such as credit card or phone payments.

 

It might be worth thinking about life insurance…

If you have federal student loans and something happens to you, that debt will not fall on your family or loved ones.

However, private loans are not forgiven when you die, so the burden of that debt might fall on your loved ones. This also applies to federal loans that have been refinanced into private ones.

If this is a concern for you, life insurance might help ease the burden of that worry. Additionally, life insurance is generally less expensive when you are young.

 

Making a budget

If you want to feel more in control of your money and spending habits, a budget might help. Budgeting comes down to knowing how much money you bring in and how much goes out.

TruStage has a collection of free calculators at your disposal like this savings goal calculator which helps you plan how much to save and how long it will take.

We also have a loan cost calculator and a credit card payoff calculator, each of which only requires a few pieces of information to help you find out how much your payments will be and how long you’ll pay them.

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