How does your financial situation compare?
When you look at your current situation, do you think that you’re doing better or worse than the average person your age? While the Lake Wobegon Effect predicts that you probably think you’re doing much better than anyone else, we actually have statistics to show how you are doing.
MSN released a report about the debt, income, and wealth of people in their 20s, with some very interesting results. As we often ask on the Lending Club blog, how do you measure up?
According to the study, 47% of people in their 20s carry credit card debt. Do you have debt? Only 32% have a 401(k) or a Roth IRA. Not having a retirement account when they are young might really hurt them when they are about to retire.
When looking at the numbers, the financial lives of 20-29 year-olds don’t seem all that rosy. 25% of them have a negative net worth and their median income is less than $30,000, even with a large percentage having a spouse and children. If you don’t follow good financial practices when you are young, the bad results can carry through into your 30s, 40s, and later.
The MSN study also offers some great advice about how to act financially in your 20s. For example, the study recommends that you live cheaply for as long as possible. Before marriage and having a family, it is much easier to live frugally. Your best shot at saving money is in your 20s.
Don’t waste the best years of your life by setting yourself up to be broke. Live frugally, invest your money, and have some fun. For investing, try stocks, bonds, mutual funds and P2P lending. Your 50-year-old self will thank you for it.