Millennials and Gen Z are suffering a ‘mental wealth’ crisis — 5 ways to quell money stress
With Christmas around the corner and federal student loans switching on next month, money stress is reaching a peak for many young people — and it’s been bad for a while.
Nearly three in four Americans under 40 say managing their finances is taking a toll on their mental health, according to a new survey from Laurel Road, KeyBank’s digital banking platform. Over 60% feel “constantly stressed.”
“Financial stress and anxiety are incredibly common feelings among Gen Z and millennials,” says Alyssa Schaefer, general manager and chief experience officer at Laurel Road. “We see that cultivating ‘mental wealth’ is clearly a priority for many individuals.”
That means building more financial knowledge and setting up a financial plan so you can feel confident about the future. Here are five ways to achieve those goals:
1. Beat your debt into shape
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While you may not be able to eliminate your student debt or credit card debt anytime soon, you can relieve a lot of pressure by getting them in the most manageable shape possible.
If you have a federal student loan, the government offers income-driven repayment plans that allow borrowers to make more affordable payments, based on what they earn. After you make 20 or 25 years of regular payments under an income-driven plan, your remaining debt will be forgiven.
Another simple money-saving step is to enroll in autopay, because signing up for automatic deposits will qualify you for a 0.25% interest rate reduction when payments resume.
On the other hand, if you have a private loan, your best bet could be refinancing with one of today’s record-low interest rates. Assuming you have a decent credit score, refinancing could help you pay off your loan more quickly and save you a huge amount in interest.
The same strategy can work for any high-interest debt you’re carrying, like the kind on credit cards. Refinancing to a lower rate could see you free yourself years sooner.
2. Create an actual budget
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About two-thirds of millennials and Gen Zers are concerned about overspending during the holiday season, but only 38% are actually budgeting.
Consider talking to your loved ones about swapping homemade gifts, like baked goods or crafts, or agree to skip the gifts and simply share the pleasure of each other’s company. You’ll probably find some of …….