The job market has been especially tough on young adults during this recession, making budgeting more important than ever.
The unemployment rate for 16- to 24-year-olds is 18.5 percent, up from 13 percent one year ago, according to the Bureau of Labor Statistics. Including full-time students, only 46 percent of young workers have jobs, the lowest percentage since World War II. Studies suggest that extended periods of joblessness for young workers can significantly depress wages over the course of a lifetime.
For people just starting their careers, the damage may be deep and long-lasting, potentially creating a kind of ‘lost generation,'” said BusinessWeek’s Peter Coy in a recent article.
As conditions improve, business owners may be willing to offer flexible work hours, telecommuting or other perks to hold on to their top talent. In the meantime, young workers struggling with increased workloads can take this opportunity to become a team leader, take on more responsibility at a higher level and expand their skill set. This is a great time to experiment in the jobs they are in. Make the most out of it.”
SmartMoney’s Sarah Morgan offered some budgeting tips for young workers in a recent piece. She advised young adults who don’t have enough money saved to cover two months’ wages to start saving right away.
She also advised young workers to cut spending on recreation, start emergency funds of up to six months’ wages, set specific goals for saving, and take advantage of employers’ offers to match 401(k) funds.