I have been guilty of ignoring problems or issues due to fear of pain, embarrassment, or the hardship it may cause. I would rather deal with it later. Maybe I thought it would go away. But I was proven wrong. The longer I ignored it the bigger it got, and the consequences continued to linger. The best thing to do is face the issue head on and soon.
What is the problem? - Overspending.
A recent article in the Wall Street Journal stated that Millennials and Generation Z have increased their credit card debt by 29% and 40% since last year. They have ignored their bank and credit card statements and continued to rack up more debt. They are overwhelmed by financial stress and are simply ignoring the problem.
The higher cost of goods and services have hit budgets hard. Another aspect is that many have become accustomed to extreme convenience services, such as food and grocery delivery. Not only has the cost of food increased but now the delivery cost and tips are added on top of this inflation.
Since COVID, Amazon, FedEx and UPS have drastically increased their presence in my neighborhood. I’m sure you have noticed this as well. Ordering online is easy and convenient. However, it does have its costs. We typically buy more when purchasing online.
People are choosing to pay the extra for their convenience. But the convenience cost is damaging their finances, increasing debt loads and killing their long-term goals.
When you do not plan, you are very likely going to make impulse and last-minute purchases. This is never a smart move. You will always spend more.
Also, younger generations are more likely to pay late fees and take advances on their credit cards.
Financial Avoidance
In a 2022 survey, the American Psychological Association found that 83% of adults reported inflation as a source of stress. Higher prices, overspending, and more debt all lead to more stress. This has led to financial avoidance. Ignoring the problem only compounds the current and future consequences.
What is the solution? – Start by facing the problem.
Ignoring the problem leads to more stress, more debt, and less savings for future needs.
As adults, we must face hard truths and take on responsibility for yourselves.
- We must save for emergencies.
- We must save for your retirement years.
- We can’t keep hiding in your current lifestyle of buying things to make you feel good for the moment.
- We must make changes now.
You can have a better life!
Here are three main takeaways:
- Spend less than you earn. You can do this. It takes time, sacrifice, and discipline.
- Stop borrowing money.
- Start saving early and regularly. It is only to be used for the intended goal.
You can’t save money when spending it all today!! Reality means being an adult.