Chloe M. – Marina High School

Saving. This is a concept that all individuals will need to learn how to do whether they come to the realization at an early age and get a head start, or when they grow up and run into problems which teaches them a valuable lesson. We can look back in time and see how people used to live. They used to work their entire lives and never even think about the idea of retirement because they didn’t realize the importance of saving. Instead, they worked long hours every day to provide for their families and loved ones. They attacked all the problems once they happened instead of preparing for them in advance. These are things that we are now trying to avoid by teaching young adults how to save. It is important to notify the younger generations with the knowledge that they may not always have a steady income and will need to have savings that they can rely on when they are in between jobs.

As technology continues to advance, the cost of living continues to increase. This is also known as inflation. Knowing the fact that everything is getting to be more expensive, it is important to plan ahead as young as when you receive your first paycheck. Many young adults believe that they can rely on their job for a steady income, however many companies do not match the rate of inflation when it comes to how much you are being paid. For example, if the rate of inflation is 4% and you are not given a 4% raise, then therefore your dollar is losing value and is now not keeping up with the costs of living. This also comes with the belief that all companies give retirement benefits. That is not true anymore. Most companies have done away with retirement benefits so they can increase their profit margin. Also, social safety nets such as Social Security could no longer exist once my generation hits the age of retirement. With all the baby boomers now redeeming their money, there are not enough people working and putting money in to sustain the amount of money that is being taken out. By teaching young adults the reality behind what will really happen as we continue to age, it will light a spark within them in order to persuade them that saving at an early age will be a benefit.

There are several things in which an individual can do to become better savers and that comes with thinking about what will happen in the long-run. If one starts to save as soon as they get their first paycheck by merely setting aside 10% of their earnings, by taking into account the compounded interest, your money will start to multiply over time. For example, say you put $100 a month at a 5% interest rate over the course of 25 years; you would have about $60,000 in the end. This is a very conservative estimate because your income should be rising as well as your ability to save, which would mean that you would be capable of putting more money in, therefore increasing your savings. Young adults needs to recognize these strategies at an early age because there will be many consequences if it is not taken advantage of. My generation, being know as Generation Z or iGeneration, is used to having technology at their fingertips with the answer only a couple clicks away. However, with the mindset that all answers can be found on the internet, this generation will have no safety net except for that in which they have prepared for themselves. As the financial advisor Suze Orman once said, “Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.”