The Millennial generation may have faced down the 2008 recession and thought that nothing worse could be in store for them, but just as the Gen Z group below them started to come of age, back to school scams and the double-whammy of COVID-19 and inflation hit. Interest rates are on the rise, supply chain issues continue to be a problem and a recession may be ahead. Whether or not a true recession is inevitable remains to be seen, but it is true that adults around the age of 40 and under are facing several economic challenges.
Even those who don’t have children or who have never been to college would be unlikely to escape news about the student loan crisis, which has affected not just Gen Z and Millennials but Gen X and Baby Boomers as well. However, it’s the younger generations who are dealing with skyrocketing tuition costs alongside the challenge of paying off loans. One of the big issues in paying student loans is interest rates, which can mount even as debtors are making minimum payments and can result in some people paying several times over the amount of the original loan.
Interest rates on federal student loans, paused during COVID-19, are currently scheduled to resume in September. Interest rates on private loans may be rising as well. A remedy that may be available to some is refinancing. By refinancing a student loan debt into a new loan, some people may be able to get a lower interest rate, substantially reducing their total repayment. Refinancing may mean more favorable repayment terms in other ways as well.
Economic instability and other factors are responsible for many younger people delaying certain markets of adulthood, including purchasing a home. In many areas, the housing market continues to skyrocket with no signs of stopping in sight. However, there are signs in many places of a slowing market. Furthermore, while some millennials are questioning the idea of home ownership altogether, Gen Z shows a greater interest in doing so, and real estate continues to be a solid investment for most people.
For those who do want to buy a home, there are some strategies that can help. There are mortgage programs for first-time buyers that can assist many people. There are creative ways to save up for a down payment. Some have turned to asking for cash for a wedding gift instead of having a registry. There might be ways to save on housing costs, such as working as an apartment manager in exchange for free rent or even living with parents. With remote working on the rise, moving to an area with a lower cost of living while keeping a higher salary is also an option for some.
Economic indicators might not be healthy across the board, but jobseekers are currently in a strong position, with employers struggling to fill positions and keep workers. While it’s true that many of these jobs are in positions that offer low pay and low job security, there are plenty of other opportunities as well across many industries, and employers are increasingly responsive to the expectations of younger workers, who are more likely to demand a great work-life balance.
