Millennials Hit Hardest by Coronavirus Recession

The coronavirus recession hasn’t been easy on anyone, but millennials may have been hit hardest.

According to many economic experts, the 73 million millennials in the U.S. could experience financial setbacks from COVID-19 that have a longer-reaching impact than those experienced by any other age group.

Here’s why the coronavirus pandemic has been especially hard for those in 25- to 39-year-old age bracket.

Another recession for millennials

Economic recessions are nothing new for this demographic. They already lived through the Great Recession of 2008, and for many, the impact of the last recession is still being felt today.

The Great Recession hit millennials when they were still in college or just starting out on their career paths. For some, it meant the choices for their first post-college job were very slim. For others, it meant dropping out of college when there was no longer a guarantee of a degree netting them a higher-paying job. Regardless of how they were impacted, many millennials are still playing catch-up from the recession of 2008.

“For this cohort, already indebted and a step behind on the career ladder, this second pummeling could keep them from accruing the wealth of older generations,” says Gray Kimbrough, Washington, D.C. economist and American University professor.

Job losses across the board

More than 40 million workers in the U.S. have filed for unemployment since the beginning of the pandemic, but this is another area where millennials have been hit harder than most.

According to a recent report by Data for Progress, 52% of respondents under age 45 have lost jobs, been furloughed or had their work hours cut due to COVID-19. In contrast, just 26% of respondents over age 45 have suffered a job loss of some kind during the coronavirus pandemic.

Millions of millennials have lost jobs that are impossible to do while adhering to social distancing mandates. At the height of the economic lockdowns in April, the economy shed a staggering 20.5 million jobs. Of these jobs, 7.7 million were in the leisure and hospitality sector — a sector that is dominated by millennials. An additional 1.4 million lost jobs were in health care, primarily in ambulatory services — another field that employs a disproportionately large number of millennials.

No nest egg

Many millennials who are still on the rebound from the Great Recession are carrying piles of debt and have minimal savings — or none at all.

According to surveys conducted in 2018 by the Federal Reserve, 1 in 4 millennial families have a negative net worth, or debts that outweigh their assets. One in six millennials would not be able to find the funds to cover a $400 emergency. For these young employees, a relatively mild setback from the coronavirus can be devastating to their finances.

Millennials also tend to neglect their retirements. A recent report by the National Institute on Retirement Security found that 66% of millennials in the workforce have nothing put away for their retirement.

Can millennials recover?

Millennials had still not fully recovered from the Great Recession when the coronavirus pummeled the economy. They have shouldered a large share of job losses and have little or no savings to fall back on.

But there is hope. Millennials may not be as young as they were during the Great Recession, but they still have time to bounce back. They can use the unique challenges presented by the coronavirus pandemic as an opportunity to reevaluate their career track and move onward toward a brighter future.

This age group, also known as Gen Y, is famous for its resilience and can-do attitude. They’ve gotten through the Great Recession of 2008 and they’ll beat the coronavirus recession, too. With hard work, perseverance and small steps toward a better future, millennials can pull themselves up and regain their financial health.

If you’re experiencing financial difficulties, we can help. Call, click or stop by Advantage One Credit Union to speak to a member service representative today.

Your Turn: Are you a millennial who has been impacted by the coronavirus recession? Tell us about it in the comments.

Learn More:
politicalwire.com
wsj.com
npr.org
investopedia.com
foxnews.com
wsj.com
cnbc.com

HisandHerMoney.com

When two people with opposite money views marry, it’s the ultimate in “He said, she said.”

He wants to save every penny so they can afford their dream house within the next five years, and she would rather live it up today while pushing off their dream a little longer.

She wants to budget every dollar to track everything they buy, and he thinks they can trust themselves to keep within their spending limit without accounting for every single purchase.

He thinks golf clubs with a four-digit price tag are a reasonable want, and she thinks they’re a ridiculous luxury reserved for the very wealthy.

And on and on it goes.

For Talaat and Tai McNeely, a pair of high school sweethearts ready to take their relationship further, the money differences were more than just an occasional spat — they were an obstruction standing between the couple and marriage.

As the McNeelys share on their blog, hisandhermoney.com, here’s a sampling of some of the financial issues they were dealing with before they married:

  • Do we let our credit scores dictate if we are compatible for marriage?
  • How will our previous money habits play a role in our marriage?
  • Do we merge our finances?
  • How can we work together to become better at life and win with money?
  • Am I a loser because I have now made my debt problems my future spouse’s problems?
  • Can I change, or is my past really who I am?
  • Should I have a secret account just in case our money situation gets worse?
  • How will we purchase a home? Do we put it in both of our names and risk not having a low interest rate due to the lower credit score?
  • Do I have to take full responsibility for our finances simply because I’m better at it?
  • Will we have to rely on two incomes to run our home?
  • What will our lives look like five years from now?

Despite one partner being debt-free and the other carrying $30,000 in debt, the McNeelys decided to get married. They knew the financial road ahead could be bumpy, but they were prepared to weather the storms together for the sake of their relationship.

Today, after years of struggling to chart their own joint money path, the McNeelys are completely debt-free, have paid off their mortgage and run a 6-figure business online. They have learned enormous life lessons on their journey toward financial wellness, and they generously share these lessons on their blog, podcasts, videos and through their private community of couples seeking financial guidance.

The couple is passionate about helping others overcome their financial differences and build a better relationship and a better future together. Check out hisandhermoney.com to learn their secrets.

Your Turn: How do you and your partner deal with money differences? Tell us about it in the comments.

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paychecksandbalances.com
hisandhermoney.com

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

Title: The Psychology of Money

Author: Morgan Housel

Paperback: 300 pages

Publisher: Harriman House

Publishing date: September 8, 2020

Average customer review:  4.14 out of 5 stars

Who is this book for?

Readers interested in learning the psychology behind life’s financial choices and how to better manage their money.

What’s inside this book?

  • Engaging short stories exploring the strange ways people think about money and teaching readers how to better understand the logic behind personal money management
  • Complex financial concepts broken into easy-to-understand narrative

Lessons you’ll learn from this book: 

  • Why managing money successfully isn’t about what you know; it’s about how you behave
  • How to reframe your perspective for making better money decisions
  • How an individual’s personal history, ego, pride and unique view of the world influences their financial reality
  • Why financial knowledge does not guarantee better financial choices
  • How to build and strengthen tools for improving the way you handle money

What people are saying about this book: 

  • “Morgan Housel is that rare writer who can translate complex concepts into gripping, easy-to-digest narrative. The Psychology of Money is a fast-paced, engaging read that will leave you with both the knowledge to understand why we make bad financial decisions and the tools to make better ones.”— Annie Duke
  • The Psychology of Money is an essential read for anyone who wants to make wiser decisions or live a richer life.”— Daniel H. Pink
  • “Housel’s observations often hit the daily double: they say things that haven’t been said before, and they make sense.”— Howard Marks

Your Turn: What do you think about  Housel’s theory ofmoney decisions being unrelated to knowledge?  Share your opinion in the comments.

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www.goodreads.com

How to Negotiate Salary for Your First Job

Things are falling into place, and after months of researching your options, polishing your resume and sitting through awkward interviews, you think you may have found your dream job.

You’ve already gone for a follow-up interview and the position is as good as yours. The only obstacle to cross before joining the ranks of the officially employed is salary negotiation.

If you’ve done your homework well, you’ll know the job you’re considering pays in the ballpark of your financial needs; however, the exact salary package you’ll be starting with depends on how the negotiations play out.

Here’s where things can get sticky. You may have your salary requirements and wish list in mind, but the company representative in charge of hiring has a lot more experience in negotiating salary than you do. It’s also easy to feel intimidated when you’re new to the workforce and desperate to find a good job.

You may not have the upper hand here, but you can still come out ahead.

Here are some tips to help you negotiate like a pro:

Choose the right time to negotiate 

Only bring up your salary requirements when you have an actual offer in hand. Don’t jump the gun and assume you’re being offered the job because you’ve had a follow-up interview and you’re getting positive vibes from the company. Talking salary before you’ve officially been offered the position can jeopardize your chances of landing the job.

Do your homework

Before you walk into that room, make sure you know the average going rate for the position in question. You can find this information through a quick online search of sites like Payscale.comGlassdoor.com and Salary.com, or by asking friends who are work in similar positions.

Once you have this number, hold it up against your own income requirements and ask for a starting salary that is slightly above your needs. You don’t want to walk away with less than you deserve, but you don’t want to overreach and come off sounding too greedy, either.

Research the company

Another crucial preparatory step for opening up the salary negotiations is to find out all you can about the company and its top challenges. Talk about ways you can help solve the company’s most pressing problems and you’ll prove you will be an employee worth hiring—at almost any price.

Understand the offer

If the company representative gives you a salary quote that is less than you expected, ask how they’ve reached this number. It’s possible that some of your skills and/or work experience were not considered when the offer was made. For example, you may have already mastered the entry-level skills for this kind of work during an internship for a similar position. This puts you at an advantage, as you won’t need to waste the company’s time and resources on basic training. Consequently, you deserve to start at a higher salary point. A simple question like this can save lots of aggravation on both sides of the desk.

Consider the full scope of the offer

When considering a position, don’t forget that job offers are about more than just salary. Look at the entire package, including all benefits, time off, retirement account contributions, etc. Sometimes, a job may have so many advantageous things attached it’s worth accepting a lower starting salary than you anticipated, as long as your paycheck will still cover your budget.

Similarly, if this job is one that offers tremendous room for growth and the ability to acquire a specific skill-set plus valuable experience, it may be worthwhile to accept it as a stepping stone for a more lucrative position in the future.

Role-play in advance

When negotiating salary, it’s important to find that sweet spot between insecurity and arrogance. It can be super-helpful to practice negotiating in advance by role-playing with a friend.

Remember not to sell yourself short. You’ve worked hard to acquire the skills and experience you have today, and you deserve to earn your true worth. Best of luck with your new job!

Your Turn: Have you successfully negotiated your starting salary at a new job? Share your best tips with us in the comments.

Learn More:
www.monster.com
www.thebalancecareers.com


Tarra Jackson: Madam Money

If you’re looking for a financial influencer who brands herself differently than theSeptFeatured2020_madammoney typical modern-day motivational speaker, you may be looking for Tarra Jackson.

Jackson, also known as Madam Money, shares her innovative ideas and money management expertise on her popular blog and online platforms.

While playing multiple public roles in the world of personal money management, she’s an award-winning speaker, best-selling author, TV and radio personality, personal finance coach and syndicated financial expert media contributor. With a personal reach such as this, Jackson is uniquely positioned to offer hardcore advice and inspiration for improving financial relationships and reaching personal, professional or financial goals.

Her extensive professional background in the financial services industry includes bank officer, corporate trainer and vice president of lending, as well as executive VP and interim CEO at an Atlanta-based credit union. Her financial counseling firm, Prosperity Now Financial Management Services, has served over 1,000 clients, including private consumers, business owners, executives and professional athletes.

The Madam Money blog is a place where people go for free financial advice that delivers valuable information and advice at a professional level.

Here is a sampling of some recent articles on the Madam Money blog:

F.A.Q. about Stimulus Checks, Unemployment and the Coronavirus Bill
Pandemic Financial Survival Tips
How to Financially Prepare for a Pandemic
31 Women Financial Experts You Should Follow

Madam Money’s financial expertise helps her clients and audience achieve dramatic results, like increased savings, improved credit scores, expanded knowledge of money management, responsible credit usage, enhanced spending, savings and investing plans and empowerment. All these approaches are designed to help you achieve short-term and long-term financial goals.

When she isn’t speaking, blogging, or coaching private clients, Jackson consults for credit unions, drawing on her more than 20 years as a financial professional to offer insightful advice and brilliant tips in the areas of operations and lending automation, as well as staff training and development.

To learn why hundreds of readers get their financial tips from Madam Money, check out Jackson’s blog, and also follow her on Facebook and Twitter.

Your Turn: Do you follow Madam Money? Tell us what you love about her approach to personal finances.

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madammoney.com
facebook.com

 

 

My Savings Has Been Wiped Clean; How Can I Replenish it?

Broken Piggy Bank with coins scattered on tableQ: The last few months have been really tough on my finances, and I’ve been forced to use my savings for getting by. My emergency fund and savings account are basically zero. Now that my financial situation is starting to improve, I’d like to start building these up again, but it’s all so overwhelming. Where do I begin?

A: Watching savings that took you years to build up disappear in just a few months can be disheartening, but it’s important to remember that you’ve made the right choice. Using emergency funds to survive prolonged unemployment, an unexpected large expense or a medical emergency is the best way to make it through a financial hardship. If your savings are depleted, though, you’ll want to start rebuilding as soon as possible to ensure you have the funds to cover a future financial challenge without falling deeply into debt.

Here’s how to start your rebuilding plan:

Set a goal
Before getting started on saving up money, it’s a good idea to establish a tangible goal. What’s your magic number? You can try to recover the value of the savings lost, or start smaller, with a more attainable goal. Bear in mind that experts recommend having funds to cover three to six months’ worth of living expenses set aside in an emergency fund or savings account.

Review your budget and trim your spending
A good place to start finding those extra dollars for savings is by carefully reviewing your spending for ways to cut back. Look for expenses that can make a difference in a monthly budget without dramatically affecting your quality of life. Think about subscriptions or services that are rarely used, a dining-out budget that can be scaled back and expensive recreational activities that can be swapped with freebies. There’s no need to live like you’re broke, but stripping your budget of some extras can give you the boost of cash you need each month to build up your savings again.

Find a side hustle
Another great way to land extra funds is through a side job. There are many ways to pad a wallet without a major investment of time. Some options include taking surveys on sites like Survey Junkie and Swagbucks and doing gig work for companies like Uber, DoorDash and Rover.

Sell your old treasures
If you’ve spent part of the COVID-19 lockdown giving your house a deep cleaning, you may have unearthed some forgotten treasures that can turn into easy moneymakers. You can sell old clothing on ThredUp, unwanted jewelry on Worthy.com, make good money off your unwanted furniture through Chairish, sell or trade unused sports equipment on Swap Me Sports and sell kids clothing and toys on Kid to Kid. Use the cash you earn from these sales to jumpstart your new nest egg.

Make a plan
Once you have a goal in place for building your savings, and you’ve maximized the possible monthly contributions toward savings each month, it’s time to create a plan. Map out a timeline of how long it’ll take to reach your goal when putting away as much as possible each month. Remember: the more aggressively you save now, the sooner you’ll reach your goal.

Start saving
It’s time to put the plan into action! The best way to ensure regular savings happens each month is to make it automatic. You can set up an automatic monthly transfer from your Advantage One Credit Union Checking Account to your Advantage One Credit Union Savings Account on a designated day of the month. You may want to have the transfer go through several days after you receive your monthly salary, or it might work out better to put a smaller amount of money into savings each week. Give us a call at 734-676-7000 to discuss your options.

Put unexpected windfalls into savings
To speed up the process of rebuilding depleted savings, you may want to resolve to put unexpected windfalls into an emergency fund or savings account. This can include tax refunds, a work bonus and gift money. If another round of Coronavirus stimulus checks is approved, consider using these funds for your savings as well. Earmarking future windfalls for savings can shorten the amount of time spent cutting corners in a budget and taking on extra jobs to build up a savings account.

Rebuilding an emergency fund and savings account from the bottom up isn’t easy. It takes commitment, hard work and the ability to keep a long-term goal in mind; however, the security that comes from knowing you have a safety cushion to fall back on in case of a financial setback will make this goal worth the effort many times over.

Your Turn:
Have you started working on rebuilding your savings? Tell us about it in the comments.

Learn More:
policygenius.com
fool.com
moneymanagement.org

All You Need to Know About Student Loan Changes During COVID-19

Female College student with class supplies in arms smiles as she is walking on campusWith unemployment levels rising and many employers cutting work hours, lots of college grads are now struggling to meet their student loan payments. Thankfully, the federal government has passed legislation to ease this burden. Unfortunately, though, many borrowers are confused about the terms and conditions of these changes.

Here’s all you need to know about the changes to student loan debt during the coronavirus pandemic.

All federal student loan payments are automatically suspended for six months
As part of The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) signed into law on March 27 all federal student loan payments are suspended, interest-free, through Sept. 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal of the loan. The suspension applies to all federal student loans owned by the Department of Education as well as some Federal Family Education Loans (FFEL) and some Perkins loans. Students do not have to take any action or pay any fees for the suspension to take effect.

Additionally, during the suspension period, the CARES Act does not allow student loan servicers to report to the credit bureaus borrower nonpayments as missed payments. Therefore, the suspension should not have a negative effect on borrowers’ credit scores.
If you’re not sure whether your student loan is federally owned, you can look it up on the Federal Student Aid (FSA) website. Be sure to have your FSA ID handy so you can sign in and look up your loans. You can also call your loan servicer directly to clear up any confusion.

Here is the contact information for federal student loan servicers:

Suspended payments count toward Public Service Loan Forgiveness and loan rehabilitation.
Public Service Loan Forgiveness (PSLF) is a federal program allowing borrowers to have their student loans forgiven, tax-free, with the stipulation that they work in the public sector and make 120 qualifying monthly payments. A disruption of these 120 payments can disqualify a borrower from the program.

According to the CARES Act, suspended payments will be treated as regular payments toward PSLF. This ensures that borrowers who have been working toward these programs will not lose the progress they’ve made toward loan forgiveness.

The same rule applies to individuals participating in student loan rehabilitation, during which borrowers with defaulted student loans must make nine out of 10 consecutive monthly payments to pull their loans out of default. The U.S. Department of Education will consider the six-month suspension on payments as if regular payments were made toward rehabilitation.

Some states and private lenders are offering student loan aid for struggling borrowers.
If your student loan is not federally owned and you are struggling to meet your payments, there may still be options available, such as loan deferment or forbearance. If you are in need of such assistance, contact your lender directly to discuss your options. Consider an income-driven repayment plan.

If you have an FFEL that is ineligible for suspension, you can lower your monthly payments by enrolling in an income-based repayment plan, which adjusts your monthly student loan payment amount according to your discretionary income. Other lenders offer similar plans, often referred to as income-driven repayment plans. If your salary was cut as a result of COVID-19, or you are currently unemployed, these plans can provide relief by making your monthly payments more manageable.

Employers can contribute toward employees’ student loan debt for temporary tax relief
The federal government offered temporary tax relief for employers contributing up to $5,350 toward their employees’ student loan payments. This benefit is in effect until Jan. 1, 2021 and it can be used for any kind of student debt, whether federal or private.

If you don’t qualify for the student loan payment suspension, you can try speaking with the human resources department at your workplace to find out how they can help you with your student loan debt at this time.

Your Turn:
Have you taken advantage of student loan debt relief offered during the coronavirus pandemic? Tell us about it in the comments.

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Cut Clothing Costs

young asian woman consults phone while shoppingIt’s a brand-new season, but that doesn’t mean you need to break your budget to get your wardrobe ready for spring! Challenge yourself to spend half of what you usually do on a new season’s wardrobe. Make the rounds of consignment shops in your community. They should be bursting with offerings from everyone else’s spring cleaning. Next, look for low-cost options at bargain-priced department stores like Marshalls and TJ Maxx. You can also find a friend to swap clothing with, and give an old outfit new life with some inexpensive accessories instead of springing for a whole new look.

Your challenge:
Cut your clothing costs this month!

Your Turn:
Show us the best of your budget-priced spring wardrobe!

Getting Ahead on Your Student Loan Before You Graduate

young woman working at a laptop in an officeAs you prepare for graduation and begin scouting different employment opportunities, be sure to look at the larger picture before you accept a position.

Hopefully, you’ve chosen a career path that will bring you joy and gratification. Equally important, though, is a job that can support your lifestyle choices. While the positions you consider for your first post-college job will likely offer the opportunity for growth, you’ll still need to pay your bills—and make your student loan payments—as soon as you graduate. A job that brings you satisfaction and a pleasant working environment will not last long if the salary it offers causes you to sink into debt.

How do you determine what kind of salary will be large enough to support your desired lifestyle?

To get this information, you’ll need to create a mock monthly budget for your post-college self.

Using a spreadsheet or paper and pen, create two columns, one for expenses and one for actual dollar amounts. In the expense column, list your typical monthly expenses, including housing costs, transportation costs, health insurance, groceries, entertainment costs, clothing costs, dining out, savings, etc. In the dollar column, list the amount of money you expect to pay every month for each expense.

Your budget should look something like this:

ExpenseMonthly Cost
Housing$1,200
Transportation$300
Health Insurance$250
Groceries$350
Student Loan Payments$350

It will take some research and some hard, honest thinking to come up with these numbers. For housing costs, take a moment to think about where you see yourself settling down after college. You don’t have to know the exact neighborhood you’ll live in, but it’s good to know the city that will work best for you in terms of lifestyle, career path, and family plans. You can narrow this down to a few choices so long as you keep it reasonable. Once you’ve chosen your desired location, research the median rental prices in the area on real estate sites like Zillow and Redfin.

Next, work on transportation costs. If you already own a car, you’ll have an idea of what it costs you each month. Otherwise, spend some time thinking about what kind of car you want to drive. You can find listings on Carfax.com. Include costs like auto insurance, gas, and upkeep, in this category.

Or, if you plan on living somewhere with reliable public transportation, you might choose this route instead. Make a calculation of how much you’ll spend on bus and/or train rides, along with the occasional cab or ride-share ride.

Complete your budget using your best estimates for each category. Once you’ve filled out each expense amount, add up your total and multiply it by 12 to give you the amount of money you’ll need each year for supporting the lifestyle of your choice. (This number will increase with inflation, but since current salaries will likely increase along with the inflation rate, this exercise can still give you an idea of the annual salary you’ll need.)
Now that you have these numbers, you’re ready to go ahead with your job search. When considering possible positions, you don’t have to choose the one that pays the highest salary if there are other things about the job you don’t love. However, it’s best to pursue positions that can actually support you.

Your Turn:
Are you choosing your first job for the salary or for other factors? Share your take with us in the comments.

Learn More:
knsfinancial.com
usnews.com
usnews.com
brazen.com

Jordan Page

Jordan PageMeet Jordan Page, a tireless mom of eight — including newborn twins. In between keeping her house running and her kids productively occupied and out of trouble, Page has built up a strong community of online followers with two separate and equally popular personal finance sites. As these communities will attest, she’s all about keeping your finances real, easy and fun!

In BudgetBootcamp, readers are invited to join a financial improvement program for just $149. The program is customizable to all life stages and circumstances, and includes 27 how-to videos, 15 workouts for your wallet, loads of budgeting tips and financial advice from Page, along with the strong community support of hundreds of thousands of families who’ve already worked through the program.

Participants will learn how to stop fighting about money, create a custom financial fitness program that actually works, slash your grocery bill in half and so much more! Page promises full satisfaction or your money back, so there’s nothing to lose by trying out Budget Boot Camp — except debt and stress over money. You can also try out the program by signing up for a 90-day Budget for Beginners Boot Camp for free.

Page’s other site, FunCheapOrFree.com, contains loads of completely free financial advice and tips, all written in an engaging and easy-to-read style that makes saving money fun. Read up on painless ways to trim your spending, budget-friendly recipe ideas, how you can save more by choosing to DIY on everything from washing your car to gift-giving, motivational messages to keep you inspired and so much more.
Page can be followed on Twitter at @budgetbootcamp and @funcheaporfree, and on Facebook.

Your Turn:
Do you follow Jordan Page? Tell us what you love about her financial approach.

Learn More:
funcheaporfree.com
budgetbootcamp.com