Personal Finance in Your 20s & 30s For Dummies

General Personal Finance Articles

Personal Finance in Your 20s and 30s: Calculate Your Financial Worth

Having a sense of what you own (your assets) and what you owe (your liabilities) is important because it provides some measure of your financial security and your ability to accomplish financial goals such as buying a home, starting a business, or retiring someday.

Define net worth

Net worth does not refer to personal possessions. Your car, clothing, television, computer, and other personal items all have some value, of course. If you need to sell them, you could get something for them on Craigslist or eBay. But the reality is that you're unlikely to accumulate personal items with the expectation of later selling them to finance such personal goals as buying a home, starting a business, retiring, and so forth. After all, these things are investments that decline rapidly in value after purchase and use.

Figure what you own: Financial assets

Determine what you owe: Financial liabilities

Net the difference

General Personal Finance Articles

The Causes of Generational Debt

For a number of years now, it has been argued that young adults are under pressures that lead them to dig deeper into debt than prior generations. The reasons cited for this generational debt have typically included

• High costs of college: Annual increases in the costs of a college education have far outstripped the increases in general prices of other products and services. The price of some private colleges now is nearly $70,000 per year!
• Stagnating incomes and job prospects: Most industries and companies compete in an increasingly global economy. And, the Internet has undermined and disrupted numerous retailers and other industries, causing incomes in those businesses to stagnate.
• High housing costs: The 1990s and most of the 2000s saw rising housing prices, which priced many entry-level buyers out of their local markets.
• College campus credit-card promotions: The availability and promotion of credit cards is a big problem. Credit cards are tempting to use during college when your income is minimal or nonexistent. On many college and university campuses, banks are allowed, through payment of large fees to the educational institution, to promote their credit cards. This practice and credit cards offering rewards are getting more and more young adults hooked on credit cards at younger ages.
• More temptations to spend money: Never before have so many temptations existed for spending money through so many outlets. In addition to the ubiquity of places to shop both nearby and online, people are bombarded with ads everywhere.

You may encounter some or all of these debt traps during your 20s and 30s. Remember that you'll always face things in life that you can and can't control. If you're aware of these land mines and can discern the difference between what you can't control and what you can constructively do to contain your spending and debt, then you're on the right track. If certain venues or situations or people tempt you to overreach, then avoid them.

General Personal Finance Articles

The Young and the Unemployed

Your job search may play out like a daytime drama, which is no surprise if you're having a difficult time finding a job. But being unemployed means you need to be especially concerned with your personal finances. The following sections point out why unemployment strikes younger people harder and what you can do during this rough time.

Understanding how joblessness can hit younger adults harder

Accessing unemployment benefits

The simplest way to find the state unemployment insurance office nearest you is to visit this website and click Unemployment Benefits on the home page. CareerOneStop operates this site — a U.S. Department of Labor–sponsored website that provides "career resources and workforce information to job seekers, students, businesses, and workforce professionals to foster talent development in a global economy."

Taking action to stay on top of your finances when unemployed

• Batten down the hatches. Evaluating and slashing your current level of spending may be necessary. Everything should be fair game, from how much you spend on housing to how often you eat out to where you do your grocery shopping. Avoid at all costs the temptation to maintain your level of spending by accumulating consumer debt.
• Work at your job search a few hours daily but not on a full-time basis. Searching for a job is hard work and creates stress for most people. You're probably not going to make the most of your job search by making it your full-time endeavor. Make some calls; arrange some appointments; send some résumés; and do some research on industries, companies, and organizations of interest every day. But I suggest doing so for no more than four to six hours per day. If you can find part-time or temporary work, spend some time doing that to earn some money and to break up the monotony of looking for work.
• Try to exercise regularly. Exercise clears the head and lifts your mood. Daily exercise is best, but if that's not possible, try to get some exercise at least every other day.
• Eat healthfully. As with exercise, eating a balanced and nutritious diet can go a long way toward maximizing your mental (and physical) health and outlook.