Blog Cover
Profile Pic

by Idris Ademola Adeleye

5 Min Read | Sun, 29 Jan 2023

Personal finance for the younger generation in 2023


  • Understanding investing
  • Learn about debt management
  • Know the importance of budgeting
  • Save more
  • Plan for retirement
  • Get insured
  • Speak to an expert
  • Summary



Money has always been a complex and ever-changing concept, and this is especially true when it comes to the perceptions of different generations. The older generation, shaped by their experiences with historical economic events, may view money and investments differently than the younger generation, who have grown up with access to technology, the internet, and an abundance of information.


The younger generation, or the GenZ, has viewed money and investing largely through social media hype and influencers and may not have the same understanding of traditional financial practices. This generation is also observed to lack excitement or motivation when planning for their financial future.


Despite this, it’s essential to understand that managing one’s finances is an essential and significant aspect that impacts the very quality of life. In this blog, we aim to explore ways the younger generation can take control of their finances and avoid potential pitfalls.


How can young adults empower themselves to control their financial future?

Financial planning as a young adult need not be as complex as presented. Here’s how you can take charge of your finances and achieve your financial goals. 


1# Understanding investing

There has been more abundance of investing options today than at any other time on the planet. But here’s an interesting stat - Nearly 44% of young adults do not invest as they are unaware of how to get started! As alarming as this stat may sound, investing and aiming for financial independence should be your top priority. 


Access your risks and start investing early. You may opt for stocks, or bonds, start a SIP, or even target index funds and real estate. Also, invest in making yourself financially literate and understand your risk appetite. For instance, if you find ‘cryptocurrencies’ to not be ‘your cup of tea,’ refrain from investing in them. The entire FOMO and unregulated advice from various social media platforms can acutely harm your finances. 


In today’s tech-dominated world, it is easy to invest with just a click. However, understanding your goals and investing per se can go a long way in ensuring financial stability and freedom.


2# Learn about debt management

Debt management is arguably the most aspect when it comes to personal finances. Student loans, credit card bills, and similar loans can deeply impact your financial planning and peace of mind. These loans can also spiral out quickly, creating a debt trap. In fact, according to a report, GenZ had an average of $20,900 in student debt!


Ideally, draw a loan only if absolutely necessary. Do not attract debt for indulgence. When using credit cards, understand the T&C, interest charges, late fees, and other associated nuances. If dealing with student debt, chalk out a plan early on how quickly you can close it. 


3# Know the importance of budgeting

A budget is a roadmap of your income and expenses and financial planning. It can directly impact your lifestyle, savings, and future goals. A great way to take control of your finances is by designing a budget. 


Watch what your income sources are and how they are being spent. This can also help you detect areas where you may be overspending, helping you cut costs and make better decisions. 


Remember, budgeting is not just only income and expenses. You can plan, save and invest for your long-term goals through budgeting, like buying a house or a car or saving for higher education and more. You can access a number of budgeting tools to ensure you have track of all your records. 


4# Save more

The importance of savings and creating an emergency fund cannot be stressed enough. 


Remember, saving is a choice. How you spend and what takes priority when concerning your lifestyle needs all directly impact your savings. Caution yourself if your indulgence is exceeding set limits or stressing your budget. 


Having a minimalist attitude and a good understanding of your long-term financial goals can help you save better and create a safety net for yourself. 


5# Plan for retirement

As young adults, most individuals focus on ‘everyday’ income and expenses rather than thinking long-term. But this is not a wise idealogy. Your retirement would be here in the ‘blink of an eye,’ and having it unplanned can land you in an unpleasant situation!


Start thinking of retirement early on, probably when you receive your first cheque. Understand the effects of inflation and explore different retirement plans. Keep aside nominal amounts every month to ensure that your second inning is a smooth ride!


6# Get insured

This is one department that most young adults are found guilty of avoiding. Complex paperwork and legalities can be one prime reason why most individuals desist from getting insurance. But is this the right move? Ask yourself, do you have appropriate health and life cover through insurance? If the answer is no, you are probably exposing yourself and your loved ones to great risk. 


One unforeseen circumstance or accident, or illness can completely derail your finances. So, whether you are a GenX, GenY, or GenZ, investing in insurance should be one of your top priorities. With unlimited access to information today, as a GenZ, you can make the most out of your insurance policies. 


7# Speak to an expert

Investing, taxes, budgeting, savings, insurance, debt, and everything finance can be overwhelming and complex to manage. Also, excessive compliance rules and hectic schedules can leave you with little time to manage your finances. 


So, if you find yourself amidst a pool of severely complicated forms and paperwork, it may be the right time to visit a financial planner or advisor. These professionals are well-versed in tailoring you a financial plan per your needs and can ensure that you have a controlled watch on your income and expenses. You may be tempted to visit the 100s of social media influencers offering all requirements of a financial planner. But this could be a potential invitation to disaster. 


Understand your needs, research well, and cut down on social media noise. 


Summing Up

As a young adult, financial planning may feel cumbersome. However, it should not deter you from taking control of your finances. Start investing early, have a budget in place, save for rainy days and also plan for retirement. Also, do not neglect to invest in insurance. Remember, no matter your age, your finances directly impact your life. It would also be wise to approach a financial planner or advisor for professional guidance.