Gen Z and Millennials are twice as likely to delay a financial milestone during Covid
Before the coronavirus pandemic broke out last March, 28-year-old Danny Samet had big financial plans for the year.
The freelance tour manager and band merchandiser aimed to pay off his credit card debt, which is about $ 6,000, he said. After doing that, he considered buying a house in Cincinnati where he would live when he was not away.
Now everything has changed.
The music industry closed due to the pandemic and Samet was unemployed. While staying afloat with savings, pandemic unemployment benefits, and performances, including the Georgia election, he had to put all other financial plans on hold.
“I just stepped on water with it,” said Samet. “I only swam a little and just came from day to day.”
Samet is like many other young adults who have had to postpone financial milestones due to the coronavirus pandemic. According to an online survey of 2,442 adults by Bankrate in March, 57% of 18- to 40-year-olds – Generation Z and millennials – said they had postponed an important milestone due to the coronavirus pandemic.
Older Americans seem to have done better in the pandemic – only 26% of those over 40 said they postponed a milestone in the past year, the survey said.
The most belated financial benchmarks, according to Bankrate, were buying or leasing a car, buying a home, career advancement, and continuing education. Less popular milestones that were delayed included having children, getting married, and retiring.
“It is clear that those who tend to be more financially vulnerable are earlier not only in their careers but also in the complex aspects of their personal financial lives,” said Mark Hamrick, senior economic analyst at Bankrate, adding that this is the youngest workers were also hardest hit by job losses during the pandemic.
The good news
In the future, there is also some good news for those who have been hit by Covid. With more and more people being vaccinated, the economy has reopened faster than expected, getting more people back to work.
That could mean the road to a full recovery is closer than previously thought, according to Hamrick. When people get back to work, they can start getting their money goals back on track.
Of course, this can be a long road for some, especially those who have had to borrow to survive the past year.
“There will still be individuals who will break away from it for some time,” Hamrick said.
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It is important for those who have been injured by the pandemic to remember that they have time to rebuild and that it does not have to be done overnight. The pandemic was an unforeseen event for which few were prepared.
“In some seasons, the biggest win is permanent,” said Tania Brown, certified financial planner and coach at SaverLife, a nonprofit focused on helping low-income Americans save. “It’s okay if you haven’t been able to achieve some of your goals – your primary goal is to live, and second, it’s achieving other goals.”
How to rebuild
If the pandemic has forced you to postpone a financial milestone, consider where you are before starting the rebuilding again.
Before moving back to financial goals like buying a home or car, first make sure you’ve built up emergency savings and paid off debt, starting with high-yield debt, Brown explained.
She recommends that people think about emergency savings in two ways: The first is to have a smaller emergency account that acts as a cushion for expenses that you may not necessarily be able to plan, such as spending money. B. a breakdown of your car.
The second tier of emergency savings comes after you have paid off your debts and are current on all bills. Then, according to Brown, you should aim to clear away three to six months of living expenses.
It is a good time to take stock of the past year and evaluate the savings goals for many. The third stimulus check debited most eligible Americans’ bank accounts and sent them an additional $ 1,400 to spend or save.
In addition, it is also tax season, which means many Americans will be getting a refund soon. So far, the average refund is $ 2,893 per IRS data.
If you’ve just received a stimulus check-up or a refund, Brown recommends taking a small amount – say 5% – to treat yourself after a difficult year. Then the rest can be diverted to get your financial goals back under control.
“A pleasure with limits,” she said.
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