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NextGen Magazine


Many 20-Somethings Find It Difficult to Save for the Future

S.J. Steinhardt
Published Date:
Jan 20, 2023

GettyImages-1171764212 Retirement Fund Jar Change Money Coins

Starting a career, paying for housing and food, paying down student debt, saving for retirement and emergencies, and having enough left over to spend on enjoying life have always been difficult. But it seems to be more difficult for today’s 20-somethings, the New York Times reported.

Buffeted by all of these factors, made worse by high inflation and an unstable job market, many young adults are struggling.

A 22-year-old Fort Wayne, Ind., social worker, Shea German-Tanner, has trouble putting as little as $50 into her savings account. With a salary of $40,000 and about $600 in her savings account, she has not started saving for retirement.

“Everyone’s telling you to save money and do this and invest, and I feel like I can’t do that because I’m living paycheck to paycheck,” she told the Times. “I feel like the older generation is constantly pushing you to do stuff like they did when they were in their 20s, but it’s not even comparable to when they were in their 20s.”

Twenty-five-year-old Aberdeen, N.J., project manager Theresa Fairless told the Times that paying off her student loans has been her priority. After paying off her $50,000 in personal loans, she still owes $23,000 of the $25,900 she borrowed in government loans because she has not been making payments during the student loan pause period.

“I was the first person I knew who had to deal with loans,” she said. Having lived at home since her 2018 graduation, she moved in with her boyfriend and tries to save from her $65,00 salary, while giving $200 a month to her mother.

“I always wanted my emergency fund to be at $10,000,” she told the Times. “I have it there and I feel like I need it to be more. I honestly feel like I’m not just saving for myself—I’m saving for my mom because I know she doesn’t have one.”

First-generation Vietnamese immigrant Thea Pham, 27, sends money to her family in Vietnam. While acknowledging her financial stability, she told the Times that, despite her high income from her finance job, it is culturally expected for her to support her family.

“The majority of my paychecks are actually sent home to my family,” she said. “I didn’t know Americans don’t do that and how abnormal it is.”

Kathia Ramirez, 24, of Bensenville, Ill., holds several part-time jobs and plans to go to college. Earning roughly $2,000 a month, she saves $200 to $300 a month in a savings account, spending the rest on groceries, gas and clothing. She hasn’t thought about saving for retirement.

“I love living at home,” she said. “It does help me save money. I have a really good relationship with my family.”

Certified financial planner Zach Teutsch advised young people to spend the time to figure out their employer’s 401(k) plan, and build an emergency fund to cover unforeseen expenses, rather than small luxuries.

“Big decisions matter a whole lot more than small decisions,” he told the Times. “Contrary to some of the advice out there, most 20-somethings should worry more about jobs, housing, transportation and less about lattes and Netflix.”

One young adult who has been able to save for the future is 28-year-old Brian Teitelbaum of New York. He earns about $90,000 a year as a project manager, and he has an emergency fund, invests, and contributes to both a 401(k) and a Roth IRA. In addition, he tries to use the subway and cooks at home to save money. He does not have any student debt and saves about $2,000 a month. He set up his paycheck to be deposited into different savings accounts.

“I think my favorite thing about finance nowadays is auto deposit,” he said.