Smart Money Moves for the Young, Saved, and Broke


Lee Jenkins offers three strategies twenty-somethings can use to transform their financial life.

If you are reading this and you are young (twenty-something or there about), and saved, there is a very good possibility that you are also broke! Nearly two-thirds of young people are experiencing some type of financial pressure. Many are struggling with late payments, chronic bounced checks, little to no money saved, bad credit, and heavy student loan debt, to name a few.

This generation of young people has sometimes been called Generation Broke! It’s not all their fault, though. They have had to endure the most aggressively marketed society in the history of the world! Everywhere they look it’s about the bling-bling! All you have to do is check out the rap videos on BET and MTV—it’s all about the car, the clothes, the pretty women, and the money! They have had more advertising impressions fly in front of them in one month than the average person had in two years some thirty years ago. To top that off, the most aggressively marketed product in our culture is debt! With five billion credit cards offers in our mailboxes last year alone, we are told easy payments are a way of life. No wonder it is so hard to get ahead financially when you’re young. The pull of the culture and the materialistic values we see make it difficult to be financially healthy. That’s the bad news.

The good news is, if you are young, there’s a great way out of your current financial situation. You have a precious commodity you can use called time. No matter how many mistakes you’ve made, if you get on the right track, you have the time to turn your financial life around and set yourself up for a great financial future.

Below are three strategies that the young, saved, and broke (or anyone else) can use to transform their financial life:

1. Know Your Credit Score

If there is one single thing that will have the biggest impact on turning a young person’s finances around, it would be the FICO score. Just about every financial move you make for the rest of your life will be somehow linked to your FICO score. A FICO score is a three-digit number that determines the interest rate you will pay on your credit cards, car loan, and home mortgage. It can also determine whether you will be able to get a cell phone or have your application for a rental apartment accepted. It can also affect your auto insurance premiums or your ability to get a job! That’s right... most employers will pull your credit history before they hire you! Make sure that you pay your bills on time, and keep your overall debt load at reasonable levels. Your goal is to get and keep your FICO score above 700. The word of God says, “A good name is to be more desired than great wealth” (Proverbs 22:1). From a financial standpoint, your credit score will determine whether or not you have a “good name.”

2. Strategically Pay Off Student Loan Debt

Over the course of your working life, a bachelor’s degree is estimated to translate into $2.1 million in lifetime earnings, compared to $1.2 million in lifetime earnings for those with only a high school degree. Collect a Master’s degree, and you’ll be up to $2.5 million. Here’s the deal, your school loan debt may be weighing you down, but it was great investment! The key is: how will you pay it off? Here are a few tips:

  • Work with your lender to find a repayment plan that fits your current financial situation. Remember, if you extend your repayment period, you will increase your total interest cost costs over the life of the loan.
  • If you have a low-rate loan, don’t rush to pay it off, it may make sense to pay any extra money towards paying off your credit card debt or saving for a down payment on a home.
  • If you have loans from a variety of lenders, you can shop around at banks, credit unions, and other loan sources, such as Sallie Mae, to consolidate.

3. Develop Multiple Streams of Income

Find a career that you love, and then diversify from your core competency. You don’t have to do something drastically different from what you already know to earn extra money. The days of depending on one stream of income are over! It’s dangerous financially to think that corporate America will always take care of you. Even if you have a good job with a good paycheck, it is still wise to develop multiple income streams. Begin now to develop and diversify your income. Don’t sit idly on ideas you may have. Nurture those God-given talents and turn them into money making ventures. You never know when one of those streams will be needed. Ecclesiastes 11:2 says, “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on earth.”

These are just a few things that young people can do to if they want to be young, saved, and wealthy! Remember now is the time to take control of your financial life. Create the financial future you want by doing what it takes today.

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