You know that financial advisors recommend actions such as paying yourself first, creating an emergency fund and using cash to keep your spending under control. However, you may find it a challenge to end up with any cash at all after depositing your paycheck and dividing it among your bills and debts.
If this is a fairly accurate description, you are like many California millennials who are struggling with debt. You want to live a comfortable lifestyle, and maybe you are even putting off starting a family until you get your finances in order. However, many adults under age 35 are stuck in a pattern of spending that does not allow much room for getting ahead of their debt.
Where does the money go?
Millennials have a bad reputation for being careless with their money and frivolous in their spending. However, the root of the problem may go much deeper. By the time you reached adulthood, you may already have had financial disadvantages that are difficult to overcome, including:
- The cost of buying or renting a home continues to increase.
- Today’s salaries do not always meet the financial needs of most millennials.
- You may max out your credit cards for essentials like groceries and gas.
- You may be an emotional spender who makes unnecessary purchases when you feel stressed about your financial situation.
- You may not have received much instruction about how to manage your finances and make prudent choices about spending and saving.
- You probably carry much more debt than your parents did at your age.
A great portion of that debt for most millennials is student loans. It is not unusual for someone your age to start adulthood with more than $30,000 in student loan debts and few career choices to justify the expense. You likely have a car loan, credit cards and perhaps tax debt that consumes your paycheck each week and leaves little for saving or planning for the future.
If you are struggling to keep your head above water, you may wonder if there are options for reducing or eliminating your debt. Fortunately, you do have alternatives, and that does not necessarily mean filing for bankruptcy. An experienced attorney can inform you about options like creditor negotiation, loan consolidation and other possibilities that may be appropriate for your situation.