SavvySugar

Twenty-Somethings Still Seeking Parental Aid

SavvySugar — Thu, 14 Aug 2008 15:30:23 -0700

An MSN Money article asking why Gen Y is broke started out as a typical article, arbitrarily wondering why we're incapable of managing our money (and asking questions like, "Is Gen Y dumb or just lazy?"), but nestled within are a few startling statistics.

This one is particularly striking: According to a recent Pew survey, 68 percent of baby boomers are supporting at least one of their adult children financially. It's hard to believe that only a third of 20- and 30-somethings are financially independent.

The reason for so many dependent young adults becomes clear with some of the other stats the article mentions. The average college debt for recent grads is more than $20,000; those between ages 25 and 34 make up 22.7 percent of all U.S. bankruptcies; the median credit-card debt of those aged 18 to 34 earning low- and middle-income is $8,200.

The good news? The more financial education we get, the less likely we'll be broke in the years to come, and we'll be able to teach our own children important lessons in financial literacy. Are you still receiving some help from your parents here and there?

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Becoming a Millionaire by 30

SavvySugar — Fri, 13 Jun 2008 11:06:19 -0700

The authors of Millionaire by Thirty: The Quickest Path to Financial Independence claim that by adopting the principles outlined in their book, "you can be earning enough to not only meet your living expenses but also to guarantee a happy, wealthy future."

They've created a 12-question quiz that supposedly measures how close you are to becoming a millionaire by 30. Answer a couple of the questions here so you know what you're in for!

Take the quiz

Making It Work in the City That Never Sleeps

SavvySugar — Thu, 29 May 2008 04:11:33 -0700

Maybe it's the resurgence of Sex and the City that has prompted all of the profiles of New Yorkers getting by on their salaries in an inflated city, but they seem to be popping up all over The New York Times during the past couple months. The notion of what is fiction and what is reality is written between the lines, though the realities they picture really aren't much different from how 20-somethings around the country try to balance the cost-of-living with having a social life. The most recent piece published in the Times described the money tactics of various NYC newcomers, specifically "those who are neither investment bankers nor being floated by their parents." Discover some of the ways they sustain living in the most expensive city in the US when you read more.

Instead of clothes shopping, one NYC dweller refreshes her wardrobe by having her mom occasionally ship some items from the storage bins that she keeps at her parents' home.
Sharing tiny apartments with strangers.
"Eating cheap lunches and skipping dinners - not just to save money, but so that drinks pack more of a punch and fewer need be consumed."
Forgoing salon hair coloring, manicures and pedicures, and waiting to get haircuts in their hometowns.
Seeking out B.Y.O.B. restaurants.
Stretching lunch into dinner by eating a later lunch.
Drinking at home before going out.
Flirting with men in hopes of them buying you a drink.
One 26-year old woman refuses to give up her Bumble and Bumble shampoo saying, “I don’t do drugstores. I will eat Pringles for dinner instead.”
One 27-year old man has simply sworn off impulse purchases and credit cards, cooks at home, pirates wireless Internet, uses Craigslist or eBay for electronics, and buys his clothes from Salvation Army and retains the receipt to write off on his taxes.

Do you see any of your own tactics in those profiled, and do you have any that you feel are unique, like the Pringles girl? Would you ever consider moving to a city knowing that you'd have to make financial sacrifices?

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Tax Breaks For 20-Somethings

SavvySugar — Wed, 21 May 2008 08:18:35 -0700

Graduating from college comes with a slew of mixed emotions and a world of opportunities, including some that may not have crossed your mind. Kiplinger's June 2008 issue recognizes that tax breaks aren't part of most students' college curriculum and rounded up all the tax breaks it could think of for newly graduated 20-somethings.

Moving expenses: New grads can deduct the cost of moving themselves and their belongings to their first job out of school, as long as the job is at least 50 miles from their old residence.
Saver's credit: Depending on their income, some young adults can trim their tax bill by up to $1,000 as a reward for contributing to an IRA, 401(k) or other retirement plan. The credit is available to singles with an adjusted gross income of less than $26,000 and married couples whose AGI is less than $52,000.
Student-loan interest: Young people can write off up to $2,500 of interest on student loans each year even if they don't itemize deductions. And now they can also write off student-loan interest paid by their parents. The IRS considers payments by parents on a child's loan to be a gift to the child.
Roth IRAs: Roths are primarily for retirement savings, but they're flexible enough to be used for a down payment on a house. You can withdraw contributions to a Roth at any time without paying taxes or a penalty. And after the account has been open for five years, you can also withdraw up to $10,000 of earnings tax- and penalty-free to buy a first home.
Tax forms: In order to get all of these benefits, it's important that young adults not file the Form 1040EZ. Filers can't claim the saver's credit, write off moving expenses or deduct student-loan interest on this simplified form. Instead, they should use the standard Form 1040.

How to Handle Parental Loans

SavvySugar — Tue, 18 Mar 2008 15:19:12 -0700

There are many sources out there that will tell you to consider any loan to a family member as a gift. And while going into the situation with low expectations would serve a relationship well, what about the loaning person's finances? Many 20-somethings are turning to their parents for help in the midst of a tougher mortgage scene, and are counting on them to pull through with a familial loan.

Any situation where money passes through related bank accounts should be handled with care. Especially when it's a large sum - a down payment for a new home or a heavy medical expense - where it's obvious that you're asking for a loan and not a gift, which means you intend to pay your parents back in full. These transactions should come with some guidelines. To see what you should consider before entering into this type of arrangement just read more.

Consider your parents finances and only ask them for help if you think they can afford it.
Be confident that you can repay the loan by coming up with a realistic payment plan.
Put all of the details in writing, including interest rate and payment schedule.
Sites like Nolo and LawDepot have promissory note templates that could serve as your IOU to your parents.
The Wall Street Journal suggests that you could formalize your loan through Virgin Money or ask an attorney to help draft a loan agreement.

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Abstract Adulthood: The Vague Years

SavvySugar — Mon, 17 Mar 2008 11:24:32 -0700

A Brigham Young study found that 80 percent of parents don't consider their 18- to 25-year-old college students to be adults. They're calling the group that's wrestling between adolescence and adulthood "emerging adults" and that label doesn't quite sit right with me. I do think there's a real gap between identifying as a teen and calling yourself an adult, but I'm not sure why academics are trying so hard to pin down every year of our lives as one thing or another.

We all have unique life experiences that cause us to feel more adult at times and less so at others, but the whole emerging-adult thing makes me feel like they're making the age group into a product. Responsibility in terms of driving, drugs, alcohol, sex, and language were factors that parents used to determine their children's levels of adulthood, while parents and their kids agreed that accepting responsibility for actions was the most important factor.

I don't think there's an "it" moment when you suddenly become an adult, but I do think it has more to do with paying your own bills and contributing to society than learning how to brake slowly. When did you start considering yourself an adult, or are you there yet?

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Entry Level Hiring Projected to Increase in 2008

SavvySugar — Mon, 25 Feb 2008 06:34:21 -0800

CollegeGrad.com estimates that employers offering entry level positions will up their hiring by 11.8 percent this year, which would be the biggest increase in entry level hiring in three years. The companies and organizations on the site's Top Entry Level Employers for 2008 vary in size and industry focus, and the list even projects the number of entry level hires each company will make this year. Here are the top ten on the list.

Enterprise Rent-A-Car
Americorps
Walgreen Company
Internal Revenue Service
Progressive Insurance
Teach For America
Deloitte & Touche USA LLP
Target
Peace Corps
Ernst & Young

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Are the Demanding Descriptions of Gen Y Accurate?

SavvySugar — Mon, 11 Feb 2008 15:23:13 -0800

New surveys and conversations among human resources execs make it seem like employees under the age of 29 (also known as Millenials and Gen Y) are a bratty bunch. A new CareerBuilder survey shows that we supposedly expect our employers to provide more benefits and other perks than our older colleagues - namely, better pay, a flexible work schedule and company-provided BlackBerrys and cell phones. Additionally, 87 percent of hiring managers say we exhibit a sense of entitlement that older generations don’t.

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Your Mom Might Have Your Boss on Speed Dial

SavvySugar — Thu, 07 Feb 2008 04:01:22 -0800

I would be mortified if my parents ever called a prospective employer to try and negotiate benefits and salary for me. Some parents of recent grads do this and apparently, some young job hunters actually want parental involvement and ask their parents to accompany them at job fairs. I think weighing where your first job will be is one of the first decisions we make as adults, and that would be undermined if parents jumped in acting like your agent. To find out how your parents could hurt your budding career just read more

I understand that parents want the best for their kids, and if your parents financed your college education they want you to put your pricey degree to the best use possible. And while many colleges lack a solid career counseling program, which causes more students to turn to their parents, I think the level of involvement should stop at advice and support. Sending your parents a job listing to see what they think is harmless, and so is asking them to look over a benefits package once you've been offered a job. What's harmful is when they do some of the legwork for you.

Employers may rule out job candidates whose parents involve themselves - they want to feel like they're hiring a competent employee who won't require a parent to attend performance reviews. As one hiring manager put it, "There comes a time when you've prepared children, and you need to let go." How would you feel if one of your parents called a potential employer?

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52 Weeks of Workin' It

SavvySugar — Mon, 21 Jan 2008 15:31:10 -0800

Fifty-two weeks of baking is impressive enough, but that many jobs in the same amount of time is a whole other feat. That's exactly what 26-year old Sean Aiken has set out to do and is documenting his journey on his website.

After graduating as valedictorian of his class from British Columbia's Capilano College, he didn't know what he wanted to do (sound familiar?) and decided to try everything. He's donating his wages to the Make Poverty History/ONE Campaign, and Random House will publish a book about his experiences next year. He may have been number one in his class, but he's just as unsure of his future as most of us 20-somethings. To see a fun video about his most recent job as a photographer, just read more

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