New Personal Finance Trends for a Changing Economy and a New Decade
- Author: Jessica Williams
- Posted: 2024-07-19
Old Advice to Scrap
First, let's look at "conventional wisdom" that may not be wise at all! It's no longer enough to just not purchase things that you can't afford. While it's a great thing to strive to not be in debt, sometimes it can't be helped. For example, some people need a car for their jobs. If your car suddenly dies, you could be left with two choices: get a low-interest car loan and pay some interest, or just lose your job!
Don't take old financial advice that could actually ruin you. This includes a fixed percentage of your income to be saved no matter what. This worked back when the "50/30/20" rule was followed by the vast majority of Americans. According to this famous New York Times article, this is simply a vestige of the "American Dream" and the "old days," and you should take a more dynamic approach to personal finance that we'll examine below.
Change the Way You See Savings
The old way was "set a goal to save a certain amount, attain it, then do what you wish". Unfortunately, we are living in very uncertain economic times, so it's very important to keep a realistic perspective on saving money. Many people see savings as a specific goal still.
Rather than seeing it as a goal, the trending advice that seems to be working for Americans is to see it as a habit you engage in daily, weekly, or monthly. Have a day where you take an honest look at your finances, with a pre-planned expected savings contribution. However, be prepared to not be able to contribute your planned amount. For example, if you plan to save $200 per week, and you had an expensive surgery, it's completely understandable to not save that money. It's important to not guilt yourself if you cannot save at certain times and may be crucial to avoiding burnout.
There Are More Financial Predators Than Ever Before!
One very unfortunate trend is that there are many more "financial predators" on the market than there have been before. While some are quite easily identifiable and have been around for what seems like forever, such as "payday loan services" and "car title loans", these new "services" cropping up are far more insidious and dangerous, not to mention misleading.
Real Estate Investment courses are the latest scam on the market. They are often in the form of long advertisements that sound like the panacea to all your financial worries. Finally, they will tell you, you won't need to worry about saving for retirement. They advise you to "just attend a seminar" that often is coercive and costs thousands of dollars. You're then advised that you'll be able to "flip houses" and make a living. While this is technically correct, most people do not have the skill set or money to make anything close to a living off of this. As a matter of fact, most people will lose money attempting this business.
You should also be wary of loans that are too good to be true. There is a dangerous precedent set by courts around the country that corporations and banks have "free speech" to potentially mislead consumers, just like you! In other words, bank agents can flat-out lie about certain things and face no sanctions. It's more important than ever to "read the fine print" before you agree to any financial transaction. It could just save you your retirement!
In Conclusion...
Finally, this is a lot of information to absorb! It's completely understandable that you'll want to save money to cover you in old age. Sticking with traditional workplace plans and making your savings a habit rather than a compulsion are your best bets. Don't fall for scam attempts by corporate profiteers who make millions by convincing people just like you that a course or seminar will "change your life"!
