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Young adults suffering through the Great Recession are having serious problems getting a handle on their spending, credit and debt woes, according to a new survey out from Western Union.

The survey, officially called the Western Union Global Payments Money Mindset Index, offers a great peek into the challenges currently facing the 18-to-34-year-old crowd, commonly known as the Millennial Generation, or Gen Y.

Among the study’s findings:

• Half of all Gen Yer’s surveyed report feeling increased stress about their financial obligations in the last six months, and more than 33% say their economic situation has worsened during that time.
• 35% have borrowed money from family members or friends.
• Nearly 30% say it’s hard for them to manage their spending.
• 27% of Gen Yer’s have been turned down for a loan or line of credit.
• 60% haven’t seen their credit scores in the past year, and 44% have never seen their scores.

Continue reading How to help Generation Y survive the Great Recession

Although some aspect of the economy are on the mend, the White House is nevertheless predicting that unemployment will remain at or above 9% until 2012. With unemployment now at 9.5%, all Americans — those working and those seeking jobs — should be safeguarding their finances and preparing for “what if” scenarios.

When considering a “what if” scenario, evaluate what could go wrong in your life. Could your health decline? Could your investments go south? Could you go through a divorce? Running a few “what if” scenarios in your head (or on paper) isn’t meant to turn you into a Negative Nellie. Instead, it’s simply a way for you to better plan for unexpected events that can happen to anyone.

Amid periods of high unemployment, the most pressing “what if” scenario you should think about is: “What if I lose my job or suffer a big reduction in income?” The loss of income can be emotionally and financially trying for anyone. I know, I’ve been through a downsizing — and it wasn’t particularly pleasant. So even if you think your job is relatively secure, it wouldn’t hurt to take some precautionary measures that will shore up your personal finances and reduce your stress in the event of an unforeseen layoff.

Here are some steps you can take amid periods of high employment:

1. Create and stick to a budget:
Try an free online software program like Mint.com to help you get started.

2. Increase your savings:
Check out AmericaSaves.org for savings tips if you’re constantly struggling to stash more cash.

3. Pay off excessive or high-rate debt:
For ideas on becoming debt free, see my book Zero Debt: The Ultimate Guide to Financial Freedom.

Read the rest of this article on Black Voices

Related articles

• Faces—and Fates—of the Jobless (online.wsj.com)
• ‘Extreme Downsizing’ May Hurt Companies Later (npr.org)

Sorry to hear about your job loss and your extended period of unemployment. It’s hard to rid yourself of credit card bills when you simply don’t have any earned income coming in because your unemployment benefits, naturally, have to just pay all your current bills. You said “we” several times in your message. So I assume that you have a spouse or a significant other. Hopefully, that person is earning W-2 wages or self-employment income. Your rental home may turn out to be your saving grace. You said that the appraisals on both homes were done “years ago.” Was that two years, five years ago or something else? Whatever the case, that’s an eternity in the real estate market. So do yourself a favor and get an up-to-date market analysis of your house. You don’t have to pay for a full appraisal at this point. Just get an experienced realtor or real estate agent to check out your rental (and your home too) to tell you what the current market value is for those properties. If you do have to sell one of them shortly, at least you’ll know how much money you can expect to net. Those funds may be sufficient to pay off the credit card debt. Meantime, read this post about tips for getting out of debt and managing your finances when you’re out of work or have reduced income. And askthemoneycoach.com/2010/03/i-have-three-credit-cards-and-my-combined-monthly-payments-are-about-700-is-it-wise-to-consolidate-through-a-debt-management-agency-will-this-affect-my-credit-score/” target=”_blank”>this one too for advice about debt management plans and a referral to the National Foundation for Debt Management (www.nfdm.org). Good luck!

I’m not opposed to filing for bankruptcy protection, but I think it should be a last resort — done after you’ve tried other things.  In your case, a bankruptcy filing may be in order, based on all the circumstances you described. From what I understand, you are currently unemployed, and have been out of a job since July 2009. You had a $70,000 a year salary, but you’ve not run through almost all your savings.

Although you are currently working as a real estate agent, you’ve not successfully closed on any deals, which means you haven’t earned any income there. You didn’t say whether or not you were able to collect unemployment, but I assume that any unemployment compensation you may have gotten has now run out. Since
you also indicated that your credit score has dropped from 750 to around 530, I can tell you that a bankruptcy filing won’t do as much damage to your credit rating at this point as it would’ve done if your credit scores were still in the mid 700s. With $40,000 in debt, a Chapter 7 bankruptcy filing would help you to wipe out those credit card bills. You did the right thing also to get a loan modification from your mortgage company. That was a smart move.

Anytime you have a substantially reduced income, or an outright elimination of income, it means you have to completely overhaul your budget. A few tweaks, changes and minor pullbacks here and there just won’t do. You’ve indicated that your income is off by 50%. As a result, you must drastically slash your current or previous spending, and also think about creative ways to raise cash. Otherwise, you risk falling deeper into debt.

How to Overhaul Your Budget

Before you look at “extras,” and any “luxuries” you may be spending money on, start by examining the very basics: like your phones, housing and car. Often, the things that we think are “necessities” have to be sacrificed just temporarily when there is a major shift in income. Since you are a self-employed as a massage therapist, it may be the case, for example, that you have multiple phones. Perhaps a cell phone, a business phone and a personal home phone. If so, consider which one – or maybe even two – of those phones you can live without on a temporary basis until you restore your income. This is the kind of thinking that will help you figure out how to get through this economic rough patch. This advice is also applicable to anyone who:

•    Has been laid off recently, for a long time, or expects to be unemployed soon
•    Has seen a big decline in self-employment income
•    Has had has their hours on the job cut
•    Has had their hourly salary or regular pay slashed
•    Has found a new job that is substantially less than the income previously earned

Lifestyle Choices

Overhauling your budget also means making tough choices about your lifestyle. An example of a major lifestyle change might be considering where you live. Do you rent or own? Can you find cheaper housing, a less expensive neighborhood, or is bringing in a roommate an option? Also, what about the car you mentioned? You said you drive only when you must. Can you sell the car and use public transportation? If you have car payments, is getting a friend or relative to take over those car payments at all feasible? I recognize that these are big shifts. But sometimes you have to dig deep when things are far more challenging than the norm. That’s why I usually recommend these strategies for people who are extremely deep in debt, or for those who have had major reductions in their income.

Negotiating and Bartering

As you consider your options, don’t forget about one of the best budget-saving strategies of all: negotiating. Whenever you are about to buy something, ask for a discount. Ask for a discount for paying for goods and services, like medical care, in cash instead of with credit. Ask for a discount if you’re at a store and you’re buying two or three of an item, instead of just one. You can even ask for, and negotiate, to receive products and services free of charge – if you’re willing to exchange your time, talents and services as well. For instance, you said you are a massage therapist. I imagine this is a stressful period for accountants. Instead of paying a CPA to do your business tax returns, maybe you can offer to provide a one-hour massage or treatment to your accountant. The idea is to think creatively about how you can both exchange value – without exchanging dollars. That’s a win-win situation for both parties and one that will help you to more quickly bounce back from your economic slump.