Globally, young professionals are feeling the pinch of growing living expenses. Due to rising grocery costs and rent prices, many people are looking for ways to augment their income without compromising their way of life. If you are having trouble keeping your budget balanced, you are not alone.
In fact, a July 2024 poll from US News showed that more than two-thirds of young Americans (aged 18 to 34) identified inflation and the resultant cost-of-living crisis as among the top issues ahead of the presidential election.
Throughout 2022 and 2023, the previous Joe Biden administration and the United States Federal Reserve kept interest rates at a very high level, which ultimately led to the downfall of the Democrats. Many people vented their frustrations over the higher costs of staples like food and housing.
As the cost-of-living becomes a serious issue globally, incumbent governments in major economies, including the Democrats in the US and the Conservatives in the United Kingdom, faced significant backlash last year. Monetary authorities are now practicing extra caution when executing policy responses to combat inflation.
However, when it comes to fighting inflation on an individual level, one must implement tried-and-true financial strategies. Making better decisions can be facilitated by consulting an expert and embracing a financially savvy mindset. Here are six methods to reduce financial strain:
Get Help From A Financial Consultant
Managing money on your own can be very difficult, particularly in the current economic climate. A financial advisor can help you monitor your expenditures, pinpoint areas for reduction, and make better investment and budgeting decisions.
Even people with lower or average incomes can access these services, as many consultants offer reasonable packages, and some provide free initial consultations.
Follow The 50/30/20 Rule For Budgeting
The 50/30/20 rule is a straightforward yet efficient approach to money management. Set aside 50% of your income for essentials like rent, utilities, and groceries, 30% for entertainment and dining, and 20% for debt repayment or savings.
This simple system can be modified to suit your needs, offering flexibility while managing your money.
Embrace Side Hustles For Extra Cash
In the gig economy, side gigs are a common way to augment income. Side gigs, such as freelance writing, driving for Uber Eats, or offering services on websites like Fiverr, allow you to make extra money without taking on too much. Additionally, you can use these opportunities to pick up new skills or even launch a full-time career.
Cut Unnecessary Subscriptions
Subscription services can stealthily deplete your funds. Review and cancel any recurring charges that you don’t require or use. Making coffee at home rather than purchasing it every day is one small change that can have a significant impact and offer immediate financial relief.
Automate Your Savings
Micro-saving apps that round up purchases to the nearest dollar and save the difference, such as Digit or Acorns, make saving money simple. These modest savings, over time, can add up to a sizable investment portfolio or nest egg.
Consider Downsizing Or Finding Roommates
Frequent rent payments are a significant expense for young professionals. Downsizing or sharing a space with roommates can lead to substantial cost savings. Financial assistance may even be available through house-sitting or relocating to a less expensive area.
By implementing these strategies, young professionals can manage growing living expenses and take charge of their finances without compromising their standard of living. Long-term success can be achieved through prudent spending, side projects, and professional advice.