- Education is changing radically.
- Finance and investing are confusing.
- Saving money is difficult.
- Assets are unaffordable.
- Debt has become excessive.
Post-High School Education
Four-year bachelor’s degrees (BS or BA) and graduate-level programs may provide a broader education but with theory-based courses. Community colleges are far more affordable. The average annual tuition at a two-year school in the United States is around $2,500, while a four-year university can cost significantly more. Cost of a four-year degree in the United States averages $30,031 per year, including tuition, fees, room, and board.Recent college graduates often carry nearly $30,000 in student loan debt, so a 10-year standard repayment plan would result in a monthly payment of around $300. If you have federal student loans, the average monthly payment is estimated at about $503.
Do-It-Yourself Education and Employer-Assisted Education
- Skillsoft—A global leader in corporate digital learning, Skillsoft provides enterprise learning solutions. Although it primarily focuses on workforce development, it might have entry-level positions or apprenticeships for recent high school graduates.
- InStride—In collaboration with academic institutions, InStride enables employers to provide career-aligned, debt-free education. While not specifically hiring high school graduates, it offers educational opportunities through its platform.
- Edmentum—This education technology company provides products and services to school districts across the United States. It offers various remote education jobs, including roles related to online learning platforms and curriculum development
Finance and Investing
Retirement planning is difficult since the event seems so far off. Young people are trying to put money away, but more and more simply don’t have the discretionary cash flow to build up their own nest egg and to take advantage of time and compound interest.While traditional wisdom suggests that a house is a good investment, the combination of high prices and high mortgage rates is shutting out a larger and larger proportion of young people who have no choice but to rent instead.
As for college, we covered the choices earlier that may include much less expensive alternatives rather than the traditional four-year degree path. Instead of risking your savings in stocks and bonds, consider certificates of deposit (CDs), high-yield savings accounts, or money market funds. Keep it simple. Keep it safe. And take advantage of any employer matching contributions if they offer a 401(k) plan!
Importance of Saving
Young people face challenges when it comes to saving for retirement. According to the Survey of Consumer Finances, in 2022, nearly half of American households had no savings in retirement accounts. In 2022, about 46 percent of households reported savings in retirement accounts.Financial planners recommend setting aside at least 10 percent of income for retirement, but workers under the age of 34 are putting away just 5.5 percent on average. About 66 percent of people between the ages of 21–32 have nothing saved for retirement.
Employers have shifted away from defined benefit plans (pensions), putting more responsibility on workers to plan for retirement. In 1989, half of working households ages 50–60 had a defined benefit plan; by 2022, only one quarter did.
Assets Out of Reach
Both new and used car prices rose to record highs during the pandemic, as the car industry was experiencing supply-chain disruptions and chip shortages. Since 2020, new car prices have risen by 30 percent, according to data shared by AI car shopping app CoPilot with Newsweek. Within the same timeframe, used car prices have jumped by 38 percent. In 2023—a year during which inflation slowed down to the point that the Federal Reserve decided to stop hiking rates—new car prices rose by 1 percent, to an average of $50,364.According to a report by Market Watch, Americans need an annual income of at least $100,000 to afford a car, following standard budgeting advice, which says you shouldn’t spend more than 10 percent of your monthly income on car-related expenses.
Americans are living through a tough housing market, and for some young people the dream of owning a home is slipping away. Mortgage rates surged in recent years, hitting the highest levels in more than two decades, topping even 7 percent. Although rates have come down slightly recently, home prices remain painfully high. It’s taking nine years for the typical homebuyer to save up for the median down payment on a home with the median value in the United States, according to Zillow data. Such conditions mean that housing has become woefully unaffordable.