In adulthood, outcomes can't be bandaged like a banged up knee. The hallmark of being a "grown up" is facing tough choices. And those decisions made in adulthood can create outcomes that ripple out for years to come.
Often the choices we make in early adulthood lead to outcomes we wouldn't necessarily have chosen. Or worse, that we couldn't predict. In these cases, it can take years or decades for the unforeseen outcomes to reveal themselves, leaving us to question those past decisions and unsure of how to manage the future.
While this may sound scary, it's not all bad. For example, when I was 25, I made the decision to follow my dreams and move to New York. Then, at 28, I did it again and moved to California. At the time, these didn't feel like tough decisions. In my mind, I needed to make these moves to move forward in my life and in my career. But making a few big moves (to the country's two most expensive cities, no less) has definitely led to outcomes that I'm just starting to fully realize. A delay in saving for retirement. A financial situation that's okay, but not quite where I'd hoped it would be. Being over 30 and still feeling like I'm not quite established.
For me, these outcomes were worth the decisions. I followed the path I'd hoped for since childhood – which means I'm more than willing to reckon with the outcomes and surge forward in any way I can. But I've been lucky.
An entire generation of young adults might not be feeling so lucky. Recent college graduates and even people in their 20s and 30s are facing financial uncertainty due to the weight of student loan debt and high unemployment and underemployment. The decision to pursue a college degree at any cost (or perhaps incognizant of the cost) has led to a trend of deferred dreams. These adults are putting off dreams of marriage, home ownership, children, even creating fulfilling careers. Some fear even more than a delay – they fear that these dreams will never be realized.
So what should they do? Certainly we can't all stand by and watch an entire generation lose out on the dreams and achievements of those before them. Complacence is not an option. Luckily, this generation is armed with tools like creativity, education, and dreams (yes, dreams are a tool!) which can help them strike a balance in their hopes and realities. Here's how it can be done.
Take Stock of What Got You Here
First of all, let's talk about the elephant in the room: the emotions you're now feeling. Given my own experience with student loan debt, I'm going to say you're probably feeling anger, fear, frustration, and regret. These are the feelings that really come to life when it becomes clear that those student loan payments each month just aren't making a big enough dent in your overall debt. The moment when you realize how long the journey to financial freedom may be.
It's okay to be upset by this. But use those feelings productively.
Those feelings of anger, frustration, or sadness can be harnessed to help motivate you into action. Take the explosion of energy and focus it by creating a plan. But first, remember to take stock of what got you here.
You have a college degree. Was it expensive? Yes. Does it sometimes feel not worth it? Probably. But does it give you a true advantage in the workforce and in your lifetime earnings – even if you're starting out underemployed? Absolutely.
Going to college is an investment – but it's only what you make of it. The more you use the skills you learned (both in the classroom and out), the more success you'll reach – making that investment well worth it in the end.
Understand What's Really Important (Hint: It's Not What People Expect of You)
The next step is to take stock of what you want. This is much harder than it sounds. Many of us deal with hefty expectations, often without even realizing it. If our friends are getting married, we wonder why we haven't yet. If our friends are high earners or buying homes, we wonder why we're so far behind. Then there's the more blatant expectations like those placed on us by families and even ourselves.
For just one moment, shirk all the expectations. What do you want? What do you really want? Forget about whether or not it makes sense or whether or not it lines up with some predetermined path in life. Be honest with yourself. Chasing someone else's dreams will only lead to unhappiness in the end. So make a list of what you think is really important. If you don't have your priorities in place, you won't have any control over making them happen.
Remember, your priorities should be the baseline against which you measure every future decision. If something you want to do will work against your goals, rethink the decision. You can carve out the path you want, but it requires targeted focus to do so.
Grab Your Finances by the Horns
Whether you're fresh out of college and just figuring out your finances or well into your career, you have to get serious and grab your finances by the horns if you haven't already. No matter how deep your debt, you can get out (and likely faster than you realize) if you make a plan of action. Follow these steps to get your financial house in order:
- Pay your student loans biweekly – this can knock years off your repayment plan!
- Find a way to earn extra money and apply that and your tax refunds to your debt.
- Use an employer 401(k) match if it's available to you or set up a Roth IRA if not – use compound interest to your advantage.
And if you have credit card debt, by all means pay it off as soon as possible (see our resource center). Student loans cost a lot less in interest and their interest is tax deductible. Credit card debt does nothing but suck the money out of your paycheck with no benefit in return.
Here's how you can eliminate credit card debt faster:
- Order your credit cards from the highest interest rate to the lowest – your highest becomes your target
- Pay minimums on all accounts but the target and try to pay over the minimum on the target.
- When the target's paid off, roll over the payments to your new target – keep doing this until you're credit card debt-free.
This is called the debt avalanche method and will enable you to pay your debt off faster, even if you can't pay much more than your monthly minimums. Then you'll have more money freed up for other goals like paying off student loans and saving for the future.
Carve Your Own Path – Don't Wait for Success to Come
Chances are when you graduated from college – especially if it was recently – things didn't turn out quite like you'd expected. The job market has been lagging for years and the benefits our parents enjoyed (such as automatic medical and retirement benefits) are going the way of the dinosaur. However, it's not all bad.
There are other benefits that our generation is enjoying that our parents never had: such as more ways to carve our own paths. Technology has made it easier than ever to create your own work through contracting or even starting your own company. Successful startups have paved the path for people all over the country to hang their own shingle. For the entrepreneurial in spirit, there's no longer a need to wait for some company to provide an opportunity. It's a pretty exciting time for those who crave career independence – and who have the tenacity to make it work.
And if stability is more your thing, that's okay. There are still plenty of opportunities to find if you can break out of the mold a little bit. Consider relocating to find better job opportunities. Think outside of the box about how you can apply your skills and passions to a job. Take on side jobs and volunteer opportunities to build experience. Whatever you do, don't wait for opportunities to come to you and don't rely on online job applications alone to help you find work.
Yes, the decisions you made in college are probably just materializing now. They take the shape of a cloud of student loan debt threatening our futures and our economy. But with strategy, perseverance, and creativity, we can all work together to turn our situations around. You don't have to wait ten years to start your life. Let's put our dreams back into the forefront and take back our lives!
This post was published by Shannon, Community and Customer Support Manager for ReadyForZero. ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.