Where Am I Going? Financial Literacy Tips for Young Adults (February 2024)
In a recent study 73% of Americans rank their finances as the No. 1 stress in life. Younger generations are even more stressed out than older generations with the majority of Gen Z’ers (82%) and millennials (81%) saying finances are at least somewhat stressful.1
1 https://www.cnbc.com/select/73-percent-of-americans-rank-finances-as-the-number-one-stress-in-life/
Have you ever tried to use a GPS without entering an address? Try typing “I don’t know where I want to go” – the result will be “No results found on Google Maps.” Apparently, a GPS requires a destination before it will give you directions.
Many young adults today feel directionless and therefore, stressed out. Children used to follow in the footsteps of their parents, often joining a family trade or business. Maybe it was not always what they wanted to do, but at least they had a road map to success. In today’s world, slogans like “you do you,” “be true to yourself,” and “live your best life” make up the air young people breathe. This mindset often leads young people to miss God’s plans for their lives.
“For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.” Jeremiah 29:11
This lack of direction combined with a widespread deficiency in financial literacy can pose a threat to young people’s financial futures, and it’s only natural they should struggle. Without a basic understanding of how to build healthy financial habits, we can’t take steps to success. Without a compelling vision for why we want to build those habits, we simply won’t take steps to success.
The good news is that we don’t need our whole life mapped out to be successful⎯we just need to spend some time working on our “how” and “why.”
Learning How to Manage Your Finances
If you are a student or early in your career, you can prepare to accomplish future goals by practicing great financial hygiene. Just like brushing your teeth helps prevent cavities, practicing financial hygiene helps you avoid unmanageable credit card debt and other situations that might derail you on your financial journey.
Start by getting educated. Learn how to manage debt, save, invest, compare options in employer benefit and retirement plans, and weigh tradeoffs in financial decisions. Biblically-based financial books such as Ron Blue’s Master Your Money can help! Then build self-awareness by keeping track of your spending and debt habits. Finally, make a spending plan that includes regular saving and giving. You can start small just to form the habit and increase dollar amounts as you earn more.
Watch out for get-rich-quick schemes that promise effort-free rewards and instead look for reliable resources. Replace the latest financial fad with money principles in the Bible that have stood the test of time and culture. These principles involve your heart as well as your bank account, challenging you to cultivate habits of generosity, stewardship, and long-term thinking.
Understanding Your “Why”
We are not only creatures of habit but also creatures of purpose. Goals with a solid “why” behind them provide motivation and direction to a financial plan. Many young people, however, struggle with goal setting. They often base their goals on impulsive desires and comparison on social media, or else fail to make time for goal setting because the next thing in a busy schedule seems more important than some far-off goal like “retirement.”
The most satisfying goals take time and are rooted in values. Instead of offering short-term gain, values-based goals bring your behavior into alignment with the kind of person you want to be.
To understand what you value, try turning off your phone and writing down what you’d want people to say at your funeral. While that might sound morbid, it can help you figure out what is most important to you. Once you know what you value, work backward from that and set smaller goals that will help you become the kind of person you want to be. Spend time in prayer and with trusted advisors to help identify your values and find your path.
Plans fail for lack of counsel, but with many advisers they succeed. Proverbs 15:22
As you go through this process, realize that it is okay to set goals, unset them, and reset them. When reflecting on his financial journey in a survey about the financial habits of young people, one twenty-something observed: “It was only when I realized that goals can and must be flexible, as we are not machines, that I began finding freedom and discipline.”
Sitting on your hands won’t get you anywhere, but rigidly pursuing a goal just because you set it five years ago may very well get you somewhere you no longer want to go.
Don’t go it Alone
As you take ownership of your finances, never hesitate to reach out to a qualified professional. Many financial professionals and banks offer Money 101 sessions to fill any knowledge gaps. Helpful apps such as FaithFi can provide the information, community, and coaching to help you set a foundation for wise stewardship.
Whatever you do, avoid the path of fear and inaction. The opportunity to build wealth for Kingdom purposes has never been greater for those with a clear “why”, an understanding of Biblical stewardship, and the support of wise council.