October 4, 2025 • 33 mins
The source, an episode from the financial blog Trader Suggest titled "15 Ways for Gen Z To Be Financially Prepared for a Recession," provides fifteen actionable strategies specifically tailored to help Generation Z build financial stability amidst economic uncertainty. Authored by Adidas Wilson, the content details practical steps for recession preparedness, including the necessity of building a substantial emergency fund (3-6 months of expenses) and learning to budget effectively using rules like the 50/30/20 method. Furthermore, the guide emphasizes the importance of generating stability by diversifying income streams through side hustles and reducing high-interest debt like credit card balances. Other key strategies involve investing early using low-cost funds, building marketable skills like coding, and strategically protecting one's credit score to ensure financial flexibility during downturns.
https://tradersuggest.com/15-ways-for-gen-z-to-be-financially-prepared-for-a-recession/
“If you don't find a way to make money while you sleep, you will work until you die.”
Warren Buffett
https://tradersuggest.com/15-ways-for-gen-z-to-be-financially-prepared-for-a-recession/
“If you don't find a way to make money while you sleep, you will work until you die.”
Warren Buffett
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Okay, let's unpack this. We are diving deep today into
well one of the most pressing financial questions out there,
especially for the newest generation hitting the workforce. We're talking
Generation Z, anyone born roughly between ninety seven and twenty twelve.
How do you build financial resilience when frankly, the economy
feels so uncertain, you know, with inflation, rising interest rates,
(00:24):
global stuff. It's made those traditional paths to stability feel
incredibly tricky right from the start.
Speaker 2 (00:31):
It really is a completely different landscape. You have to
acknowledge that the economic world Gen Z is stepping into
it's fundamentally different from what millennials or Gen X saw.
Often you're dealing with more student data, housing market that
seems well, kind of impossible. Yeah, But on the flip side,
there are these unprecedented opportunities too, right in the digital space,
the gig economy. So our mission today is pretty clear.
We've dug into an excerpt from Adidas Wilson over at
(00:53):
Traders suggest it lays out fifteen practical, actionable steps. We're
basically looking for the blueprints, the shortcut, if you will,
to building financial stability and resilience that can sit you
the listener up for the long haul, not just the
next few years, but like decades.
Speaker 1 (01:09):
Yeah, And what jumps out right away is that this
isn't just you know, sit back and wait advice. This
deep dive is really heavy on being proactive building strong
financial habits now, and it seems tailored to the unique
pressures and maybe opportunities this generation has. We're talking defense first,
building that solid safety net before we get into the
more aggressive stuff like investing. So let's kick things off
(01:32):
with the absolute must have step one, the foundation. That
emergency fund. We all kind of know we need one,
but what are the specifics here, especially for a gen
z earner maybe starting out with a smaller salary.
Speaker 2 (01:42):
Right the emergency fund it's basically your financial shield, you know,
against sudden shocks like losing your job. But the goal
needs to feel doable. The source material is very clear,
aim for at least three to six months of essential
living expenses, and essential really is the key word there.
Rent growthries, utilities, minimum debt payments, stuff you absolutely have
(02:03):
to pay. This buffer is what stops a temporary setback
like a layoff, from turning into a total financial disaster
where you're forced into taking on really expensive.
Speaker 1 (02:11):
Debt, and I like that the advice seems designed to
get past that mental block of starting, because looking at
a big number like maybe ten thousand dollars can just
make you freeze up right exactly. That's a huge hurdle.
So the actionable starting point is actually pretty modest. It's
all about consistency. Just set aside, say ten dollars or
even twenty dollars a week. The idea isn't to make
(02:32):
your current life miserable. It's about building the habit, the
muscle memory, and to put that into perspective, saving just
twenty dollars a week that adds up to over one
thousand dollars one thousand and forty dollars in a single year.
For a lot of people, that amount could cover a
month's rent and a pinch or fix a sudden car problem.
It gives you this psychological breathing room that's almost as
(02:52):
valuable as the cash itself. Consistency over amount, that's the
key at the start, really, and you absolutely can't just
let that cash sit there doing nothing, especially with inflation.
Leaving it in a standard savings account from a big
bank earning practically zero interest.
Speaker 2 (03:05):
You're basically letting inflation nibble away your safety net. It's
like throwing away free money. Really. The source strongly suggests
using high yield savings accounts. Hyssays. They mentioned platforms like
Alley or Marcus by Goldman Sachs as examples. These online
accounts offer way better interest rates, I mean sometimes forty
or fifty times higher than the old brick and mortar banks.
(03:26):
The money is still totally accessible, you know, liquid, You
can get it fast if you need it, but it's
actually growing a bit while you're building it up. Take
some of the friction out of saving.
Speaker 1 (03:34):
Okay, so we've got the fun started. Moving on step two.
Making budgeting a cornerstone sounds basic maybe, but for a
generation facing historically high living costs, is that classic fifty
to thirty twenty rule fifty percent needs, thirty percent wants
twenty percent savings debt even realistic when rent might eat
up like forty five percent of your paycheck right off
(03:54):
the bat, how do you handle that friction?
Speaker 2 (03:56):
That's probably the biggest challenge for applying traditional budgeting rules
to gens. Absolutely, when your needs bucket, the fifty percent
is immediately overwhelmed by housing costs. The rule feels broken
from the start, So the fifty to thirty twenty framework
it has to be seen more as an ideal target,
you know, something to aim for, rather than a strict
law you can follow from day one. If rent takes
(04:16):
forty five percent, like you said, that leaves only five
percent for everything else es central growth, yes, utilities, transport.
That realistically means you have to be really aggressive about
shrinking that thirty percent wants category, maybe down to fifteen
percent or even ten percent for a while, and you're
forcing that leftover slice maybe fifteen or twenty percent back
into needs or ideally pushing it towards that twenty percent
(04:37):
goal for savings and paying down debt.
Speaker 1 (04:38):
So it's less of a rigid rule and more like
a temporary adjustment, a structure you work towards as your
income hopefully grows or you find ways to cut costs.
Speaker 2 (04:46):
Precisely, it's a goalpost. Let's take a simple income, say
two thousand dollars a month under the ideal fifty thirty twenty.
That means four hundred dollars needs to go straight to
savings or debt reduction, no questions asked. Your housing costs
make that impossible right now. The source really stresses that
you must review your budget every single month. You can't
(05:07):
just set it and forget it. You have to keep
checking in to make sure the wants that eating out,
the new clothes, the subscriptions aren't creeping back up and
stopping you from hitting that vital savings target.
Speaker 1 (05:16):
And what tools can help with that keeping track and
making those adjustments on the fly.
Speaker 2 (05:20):
Yeah. The source mentions a couple of main types apps
like Yana. You need a budget work on this zero
based idea where every single dollar gets assigned a job.
That's really good for beginners, for gen Z starting out
because it forces you to be intentional with every dollar.
Then you have apps like mint, which are great for
just tracking where your money has already gone, visualizing spending patterns.
Using one of these regularly turns budgeting from this vague
(05:43):
idea into something real time, something actionable. It helps you
tweak that fifty to thirty twenty mix month by month
as things.
Speaker 1 (05:49):
Change, which flows right into the third defensive step, radical
expense reduction.
Speaker 2 (05:55):
Okay, so we've maybe found some money by budgeting, but
now we need to actively hunt down the waste. Because
lean spending habits are key in a potential recession, right, absolutely.
Speaker 1 (06:05):
The main target here is what the source calls subscription creep.
You know, auditing and slashing all those automatic payments, streaming services,
gym memberships, you don't use, software trials, you forgot about
cloud storage.
Speaker 2 (06:19):
All that stuff.
Speaker 1 (06:20):
It adds up incredibly fast, almost without you noticing. It's
a quiet drain on a typical twenty somethings budget.
Speaker 2 (06:26):
Oh yeah, the free trial trap. Sign up forget, and
suddenly you're paying fifteen dollars a month for something you
used once exactly.
Speaker 1 (06:32):
And it seems small, but look at the example they give.
Just cutting two of those fifteen dollars a month subscriptions
saves you three hundred and sixty dollars a year. That
three hundred and sixty dollars isn't hypothetical, it's real cash
freed up. You can funnel that straight into the high
yield emergency fund we talked about, or throw it at
some high interest debt.
Speaker 2 (06:47):
It's not just subscriptions, though, is it. It's also about
those daily habits, especially food that's often the next biggest
expense after rent. Yeah, definitely. The big practical shift suggested
is really focusing on cooking at home rang often instead
of relying on takeout or restaurant meals, which, let's face
it is super common for gen Z. Making your own
meals can literally cost fifty percent to seventy five percent
(07:10):
less than ordering in. Think about it, if you're spending
say one hundred dollars a week on grabbing food out,
you could potentially say fifty to seventy five dollars of
that just by cooking over a year. That's easily into
four figures saved, which directly helps loosen the squeeze from
those high housing costs.
Speaker 1 (07:27):
Okay, so pulling this first part together, what does it
all mean? It means actively finding those hidden dollars, whether
it's three hundred and sixty dollars from cutting streaming services
or potentially thousands from cooking more, and then systematically moving
that money, moving it into the emergency fund or maybe
towards debt. And they mentioned tools like rocket Money specifically
for sniffing out and canceling those unused subscriptions easily. All right,
(07:48):
so we've tightened the bell, found some cash, started building
the safety net. Now let's talk about stopping the leaks.
Dealing with debt that can really drag you down when
the economy gets shaky.
Speaker 2 (07:57):
Right, This next part is all about tackling those high costs, liabilities,
things that can become a real burden, maybe even overwhelming
during an economic downturn, when your income might feel less secure.
It's about reducing financial friction to free up cash flow.
Speaker 1 (08:12):
And we start with step four attacking high interest debt.
This feels urgent when things feel uncertain. This kind of debt,
especially credit cards, it's like an anchor, isn't it actively
pulling you down?
Speaker 2 (08:24):
It really is. The Source hammers this point home. High
interest debt, especially credit card balances, can spiral completely out
of control because of how interest compounds. Credit cards often
have aprs, you know, interest rates averaging twenty percent or
even higher. So prioritizing any debt with an interest rate
above say seven percent, that's probably the single most powerful
financial move a young person can make to free up
(08:46):
their future earnings.
Speaker 1 (08:46):
And how should you go about attacking it? There are
those two main methods people talk about, right, snowball versus avalanche.
Which one does the source lean towards for actually saving money?
Speaker 2 (08:56):
The source focus is squarely on the strategy that saves
you the most money mathmat, which is the avalanche method.
This means you tackle the debt with the absolute highest
interest rate first, hit that one hard, while just making
the minimum payments on everything else. This approach definitely saves
you the most cash and interest over time and gets
you out of debt faster on paper. Now you mentioned
(09:18):
the snowball method paying off the smallest balance first. That
could be great for motivation, giving you quick wins, which
some people really need to stay on track.
Speaker 1 (09:26):
Okay, so avalanche is financially optimal, but snowball might feel
better psychologically for some. The source is pushing for efficiency,
which makes sense for building long term resilience exactly.
Speaker 2 (09:38):
Efficiency is the name of the game here, and let's
see what that looks like. They give a good example.
Say you have a two thousand dollars credit card balance
sitting at twenty percent interest. If you just pay an
extra one hundred dollars each month towards it beyond the
minimum over a year, that saves you over four hundred
dollars in interest compared to just sticking with the minimums.
That's four hundred dollars back in your pocket, real money.
(09:58):
You can then use for other goals like hitting the
next debt on your list or boosting your savings.
Speaker 1 (10:03):
Okay, makes sense. Step five is about protecting your credit score.
This number can feel kind of abstract, but it has
huge real world consequences, doesn't it, especially when lenders tighten
up during a recession.
Speaker 2 (10:15):
Oh? Absolutely huge. A strong credit score is your key
to getting good terms on almost everything financial. We're talking
lower interest rates on car loans, getting approved for an
apartment rental, sometimes even affecting your insurance premiums. During a recession,
credit generally gets tighter, lenders become more cautious, so having
a good score becomes even more critical. The specific target
(10:36):
recommended in the source is to aim for a score
above seven hundred that puts you solidly in the good
to excellent range, marking you as a low risk borrower.
Speaker 1 (10:45):
And what are the main habits to build and maintain
that score, especially if you're younger and maybe just starting
to build a credit history.
Speaker 2 (10:53):
Two things are absolutely critical. First, and this is the
biggest one, pay every single bill on time, every single month.
Payment histree makes up about thirty five percent of your score.
It's huge. Second, keep your credit card balance is low
relative to your limits. This is called your credit utilization ratio.
You want to keep it below thirty percent. Lenders see
high utilization like maxing out your cards, as a sign
(11:14):
of financial distress, and they.
Speaker 1 (11:15):
Give an example of what that thirty percent looks like practically.
Speaker 2 (11:18):
Yep, if you have a credit card with say a
five thousand dollars limit, you'd want to keep your balance
under fifteen hundred dollars, ideally fousand dollars thirty cents fifteen
hundred dollars. But really even lower is better, closer to
ten percent if you can manage it. The key is
you don't have to guess. You need to monitor it.
Platforms like credit Karma lets you check your score for free.
You can see how you're doing, track your progress, and
(11:41):
understand how your actions are impacting your score in real time.
Speaker 1 (11:44):
All right, last one in the section step six. This
tackles the elephant in the room for so many in
gen Z student loan repayment. That average debt figure is
pretty staggering.
Speaker 2 (11:53):
It really is. The context is sobering. The average gen
Z graduate is looking at around thirty thousand dollars in
student loan debt. Now imagine a recession hits, maybe your
job prospects dim or your hours get cut. That fixed
monthly loan payment can suddenly become incredibly difficult, even impossible
to manage. So the strategies recommended focus on reducing that
monthly burden. Explore things like income driven repayment IDR plans,
(12:17):
which are just your payment based on your current income
and family size, or look seriously into refinancing options with
private lenders if you have good credit and stable income.
Speaker 1 (12:25):
What's the difference there? Because IDR plans and refinancing seem
to solve different problems, don't they.
Speaker 2 (12:30):
They really do. Refinancing is usually about getting a lower
interest rate. This saves you money over the long term,
but it often requires you to have a solid income
and a good credit score already. Income driven plans, on
the other hand, are focused on lowering your monthly payment
right now. This is super helpful during periods of financial instability,
but the trade off is you might end up paying
(12:52):
more interest over the total life of the loan because
you're paying it off slower. The source suggests weighing both
options based on your immediate cash flow needs versus your
long term savings goals.
Speaker 1 (13:02):
Can refinancing actually make a noticeable debt in that thirty
thousand dollars average debt.
Speaker 2 (13:06):
Yes, a really significant measurable difference. The example given is
refinancing a thirty thousand dollars loan from say six percent
interest down to four percent over a standard ten year repayment.
That saves you two thousand dollars in interest payments. That's
two thousand dollars extra cash flow, which again is critical
when things feel unstable. It's also why staying plugged into
(13:28):
official sources like student a dot gov is so important,
keeping track of any relief measures, forgiveness programs, or changes
to repayment plans. If you connect all this back to
the bigger picture, reducing those fixed monthly costs like high
loan payments, it frees up that vital cash flow. That
flexibility is really what separates people who are prepared from
those who feel completely overwhelmed when the economy shifts.
Speaker 1 (13:50):
Okay, so we've built the foundation in that safety net.
We've started tackling the debt friction. Now it's time to
shift gears a bit move towards offense. This next part
is about strategies to protect and actually grow your wealth.
Turning those defensive savings habits into something more like aggressive growth.
Step seven is all about income diversification, right.
Speaker 2 (14:08):
The basic idea here is pretty simple but powerful. Relying
on just one paycheck one source of income is inherently risky,
especially you know when companies start talking about layoffs during
economic downturns. Having multiple income streams acts as that crucial buffer.
If one stream slows down or disappears, you hopefully have
others to rely on. It reduces your vulnerability.
Speaker 1 (14:30):
Yeah, and gen Z seems uniquely positioned for this, doesn't it,
given how comfortable they generally are with digital platforms and
the whole gig economy thing.
Speaker 2 (14:38):
Absolutely, they can tap into immediate cash flow options like
driving for Uber, delivering for DoorDash, or doing odd jobs
via task grabit. Those are great for quick supplemental income
when you need it. But maybe more strategically, they can
monetize specific skills. They have skills that are in demand
through freelancing. We're talking platforms like upwork or fiver. If
you have skills in writing, graphic design, managing social media,
(15:01):
even basic website updates, businesses all over the world need
those skills, often on a project basis.
Speaker 1 (15:06):
What kind of real money are we talking about here?
What's the potential earnings that might motivate someone to spend
their evenings doing freelance work instead of you know, relaxing.
Speaker 2 (15:16):
Well, even a gen Z freelancer with fairly basic graphic
design skills, for example, could potentially earn somewhere between twenty
and fifty dollars an hour. Now, this side income might
not replace a full time job, not necessarily, but earning
an extra, say one hundred and two hundred dollars a week,
that could directly fund that four hundred dollars monthly savings
goal we talked about earlier, or it could go towards
(15:37):
aggressively paying down that high interest debt. It literally turns
your spare time into a predictable cash generating machine.
Speaker 1 (15:44):
Okay, that leads nicely into step eight, starting to invest early.
This is where the real long term wealth building happens. Right,
even if the market feels choppy or uncertain. Now, time
is the biggest advantage this generation has.
Speaker 2 (15:56):
Yes, the core concept here, the one you absolutely have
to grasp, is the power of compound interest or compound growth.
Your investments don't just grow, The growth itself starts to
generate more growth. It snowballs over time, and the money
you invest today in your early twenties perhaps has potentially
forty or fifty years to compound and grow. So even
(16:17):
if the economy feel shaky right now, the basic strategy
doesn't change. Start investing as soon as possible, and the
recommendation is to start with low cost diversified index funds
or ETFs.
Speaker 1 (16:27):
Why index funds, specifically, why not try picking the next
big winning.
Speaker 2 (16:31):
Stock because index funds dramatically reduce your risk. Instead of
betting on the success or failure of one single company,
which is incredibly hard to predict. And index fund tracks
a broad market index like the S and P five hundred,
you're essentially betting on the overall long term growth of
the economy or a large sector of it. They're cheap
to own, easy to understand, and historically they provide pretty
reliable returns over the long run. You can easily buy
(16:54):
them through user friendly platforms like Vanguard or Fidelity.
Speaker 1 (16:57):
And here's where it gets really interesting, maybe even mind blowing.
The sheer power of starting now versus waiting just a
few years.
Speaker 2 (17:05):
Yes, the compounding example they use is powerful. If you'd
invest just one hundred dollars a month. Maybe that's achievable
by cutting some expenses, or from that side, hustle into
an S and P five hundred index fund. Assuming it
delivers the historical average return of around seven percent per year,
that relatively small, consistent investment could grow to over fifteen
(17:25):
thousand dollars in just ten years. Think about that. Fifteen
thousand dollars is often half the average student loan burden
for gen Z. That's the massive difference between starting your
early twenties versus waiting until your thirties. You lose an
entire decade of that exponential growth and you can never
really get that time back.
Speaker 1 (17:41):
But we have to be realistic too. The gen Z
investment landscape is well, kind of wild, sometimes influenced heavily
by social media things like Memestock's Crypto investing when things
feel uncertain can seem really risky. What safety tips are
crucial for beginners who might be tempted by those high risk,
high reward plays.
Speaker 2 (17:57):
Yeah, that's a really important point. There. Strongly cautions against
using risky single stock bets or highly speculative assets like
crypto for your foundational wealth building, especially not during boll
little markets. While those things can seem exciting, they should
probably be limited to a very, very small part of
your overall portfolio. Think of it as play money you
(18:19):
can genuinely afford to lose completely. For your main serious
investment capital, consider using robo advisors like Betterment. These platforms
automatically build and manage a diversified portfolio for you based
on your goals and risk tolerance. They handle the rebalancing
and keep you disciplined, which is key when market noise
gets loud.
Speaker 1 (18:37):
Okay, solid advice. Step nine, living below your means. This
one feels maybe the hardest because it's less about a
specific action and more about a mindset shift right, avoiding
that trap of lifestyle.
Speaker 2 (18:48):
Inflation exactly, It's about consciously choosing a lifestyle that allows
for ongoing financial flexibility. Lifestyle inflation is that almost unconscious
tendency we all have as our income goes up. Maybe
you get a raise or a better job, Our spending
automatically expands to meet it. You upgrade the apartment, get
a nicer car, eat out more often. The goal here
(19:09):
is to intentionally create a gap between what you earn
and what you spend.
Speaker 1 (19:13):
So what's the practical way to apply that. Let's say
you finally get that first significant raise, what should you
actually do?
Speaker 2 (19:19):
The advice is really concrete. When you get a raise,
make a conscious commitment to save or invest at least
fifty percent of that increase. Don't just let your spending
naturally absorb the whole amount. So if you get an
extra five hundred dollars a month, maybe only allow two
hundred and fifty dollars of that to flow into your
regular discretionary spending. The other two hundred and fifty dollars
goes straight to savings, investments, or extra debt payments. This
(19:43):
prevents your baseline cost of living from constantly ratcheting up,
which is exactly what eats away your financial flexibility when
times get tough. Ultimately, it comes down to being mindful
about your spending, really asking yourself that question before you
buy something significant, do I actually need this or do
I just want it. If you can build the habit
of saving more aggressively during the good times by consciously
(20:05):
resisting unnecessary upgrades, you'll be far better protected and much
more adaptable if your income takes a hit later on.
Speaker 1 (20:12):
Right, So, economic uncertainty usually means a tighter, more competitive
job market. This whole next section is focused on investing
in yourself, in your human capital to basically make yourself
more employable and keep your income stable no matter what
the broader economy is doing.
Speaker 2 (20:25):
And this is where the return on investment can be massive, truly.
Starting with step ten, building marketable in demand skills. Why
is this maybe even more critical for gen Z compared
to previous generations.
Speaker 1 (20:38):
Well, because in a tough job market, employers prioritize people
who bring skills that are valuable right now and ideally
valuable across different industries. You need versatility. It's not enough
just to know your specific job. You need transferable skills.
The source specifically calls out things like coding, data analysis,
digital marketing. These are skills that business this is pretty
(21:00):
much always need, even if consumer spending slows down in
other areas.
Speaker 2 (21:04):
They allow you to pivot right if your main industry
gets hit hard, Having those skills might open doors elsewhere.
Speaker 1 (21:09):
And the good news for gen Z is that getting
these skills doesn't necessarily mean going back for another expensive degree.
The barriers are lower now.
Speaker 2 (21:17):
That's exactly right. Traditionally, acquiring these skills might have meant
expensive courses or degrees, but the source points out there's
a wealth of free or low cost options available now.
You can use platforms like code Academy for learning to code,
or look into Google's career certificates for things like data
analytics or IT support. These platforms offer training that's often
(21:39):
recognized by industry, and you can often complete them without
taking on huge amounts of new debt. For someone maybe
already dealing with student loans, that's a game changer. You're
boosting your skills without digging a deeper financial hole.
Speaker 1 (21:52):
And the potential payoff for putting in that effort learning
those skills can be pretty substantial.
Speaker 2 (21:57):
Yeah. The example they give is really compelling. Learning a
specific in demand skill like the programming language Python that
can directly open doors to tech jobs with median salaries
often ranging from seventy thousand dollars up to one hundred
thousand dollars or more. That's a potentially massive immediate boost
to your earning potential all from investing time and learning
(22:19):
through a certificate or online course, maybe even a free one.
It fundamentally raises your income sealing, which is arguably the
best defense against any economic downturn.
Speaker 1 (22:28):
Okay, skills are key. Then Step eleven is about strategic networking,
building those professional connections before you actually need them. This
can feel kind of awkward, especially for younger folks, but
the source says it's.
Speaker 2 (22:39):
Crucial, absolutely crucial. Your professional network isn't just about finding mentors,
though that's valuable too. It's often about getting insider knowledge
on job openings, sometimes before they're even publicly posted, especially
when the job market is tight and official openings get
flooded with applications. Many many jobs are filled through referrals.
If companies aren't advertising widely, they're often hiring people recommended
(23:02):
by their current employees.
Speaker 1 (23:03):
So what's the difference between just adding random people on
LinkedIn and actually building strategic relationships.
Speaker 2 (23:09):
It's all about intentionality. The methods suggested are a mix. Definitely,
attend industry events, whether they're virtual or in person. Actively
participate in relevant LinkedIn groups for your field. Engage professionally
on platforms like x formerly Twitter. But it's not just
about passively collecting contacts. It's about adding value where you can,
(23:31):
asking thoughtful questions, sharing relevant information, demonstrating your interest and
competence so that When someone in your network does hear
about an opportunity, you're someone they think.
Speaker 1 (23:40):
Of, and they even suggest a measurable goal for this,
which helps make it less abstract.
Speaker 2 (23:44):
Yeah, the recommendation is to try and meaningfully connect with
maybe ten new professionals in your field each month. That
sounds like a lot, but even sending a few thoughtful,
personalized messages or engaging in group discussions adds up. That
kind of focused effort can significantly expand your valuable network
over a year. And it brings up that important question,
(24:05):
doesn't it. How many jobs are really found through referrals
versus just applying Online Studies consistently show referrals have a
much higher success rate. So networking isn't just nice to
have its essential career insurance, especially during uncertain times.
Speaker 1 (24:20):
Makes sense. Finally, in this career section, step twelve talks
about exploring recession proof careers. This is about maybe aligning
your long term path with industries known for stability rather
than chasing explosive but potentially volatile growth.
Speaker 2 (24:34):
Right. The core idea is reducing your personal risk of
unemployment by choosing fields that tend to remain stable or
even grow when overall consumer spending dips, think about sectors
that provide essential services. The source points to fields like healthcare, education,
and cybersecurity, as generally stable people always need medical care,
(24:55):
kids always need schooling, and businesses always need to protect
themselves from digital threats regardless of the broader economic climate.
These sectors are less sensitive to economic cycles than say,
retail or luxury goods.
Speaker 1 (25:06):
But let's play Devil's advocate for a second. Doesn't choosing
stability sometimes means sacrificing the potential for that really high
salary growth you might find and say a high risk
tech startup.
Speaker 2 (25:17):
That's often the perceived trade off. Yes, and the source
isn't saying everyone must go into these fields. It's advising
prioritizing stability if your main goal is resilience during uncertain times. Sure,
working in education might not offer the same potential salary
ceiling as being an early employee at a unicorn startup,
but it likely offers much more consistent, reliable income during
(25:39):
a recession for someone whose top priority is weathering an
economic storm. The dependability of a job in healthcare, like
being a certified nursing assistant might be more valuable than
the high risk, high reward nature.
Speaker 1 (25:52):
Of a startup, and for someone who is maybe already
working but feeling nervous about their industry and wants to
pivot quickly towards one of these more stable fields, what
are some practical options.
Speaker 2 (26:02):
Pursuing specific, relatively quick certifications is often the key. The
source gives a great practical example becoming a Certified Nursing
Assistant CNA. A CNA program can often be completed in
just four to twelve weeks. It's relatively low cost compared
to a full degree, and it provides immediate entry into
jobs in the very stable healthcare sector. With median pay
(26:22):
around thirty five thousand dollars annually, it's a fast track
to securing employment in a field likely to remain in demand.
Speaker 1 (26:28):
All Right, we've covered the defensive moves, tackling debt, boosting intome,
and shoring up career resilience. This final part, Part five,
is all about gaining an edge through knowledge and leveraging
some unique advantages available especially to younger people. Step thirteen
is investing in financial education itself.
Speaker 2 (26:44):
Yeah, knowledge really is power when it comes to finance,
isn't it. Understanding the basics and even some of the
complexities leads directly to making better, less emotional decisions. When
you understand why diversification matters, or how compound interest actually
works mathematically, or the relationship between risk and reward, you're
less likely to panic and sell when the market dips
(27:06):
or chase unrealistic returns based on hype. It helps you
stick to your long term strategy.
Speaker 1 (27:11):
And what specific resources does the source recommend for gen
z to get up to speed? Maybe moving beyond just
classroom theory.
Speaker 2 (27:18):
Well. For books, they suggest titles like The Millionaire next Door.
Books like that are great because they often focus on
the actual habits of people who build wealth steadily over time,
not just on stock market wizards or lottery winners. It's
about behavior. For podcasts, they mentioned shows like The Money
with Katie Show as an example. Resources that provide practical,
relatable advice on things like budgeting, saving, and getting started
(27:41):
with investing in a way that feels accessible.
Speaker 1 (27:43):
And if buying books or paying for courses is a
stretch right now, there are solid free options too right
to build up that financial knowledge base.
Speaker 2 (27:51):
Oh, absolutely don't overlook free resources. Platforms like Coursera or
con Academy offer high quality courses on personal finance, investing,
base economics all for free. Think of it like building
a knowledge mode around your finances. The more you understand,
the better protected you are against making costly mistakes or
falling for bad advice.
Speaker 1 (28:11):
Okay, Step fourteen is a really tactical one. Leveraging student
discounts and benefits. This is a unique advantage, often time limited,
that many in gen z still have, and they should
absolutely milk it for all it's worth.
Speaker 2 (28:24):
Yes, the concept is super simple. If you still qualify
for student status, you likely have access to a ton
of discounts that can directly free up cash. Every dollar
saved through a discount is a dollar you can immediately
redirect towards their emergency fund, paying down debt, or investing.
It's like an instant, guaranteed boost to your cash flow
that often disappears the moment you graduate. Don't leave that
(28:45):
money on the table.
Speaker 1 (28:46):
Where should people look for these? Beyond just the campus bookstore, Check.
Speaker 2 (28:50):
Out dedicated platforms like Unidas or student Beans. These sites
aggregate discounts on tons of stuff tech, software, clothing, travel, entertainment.
Get in the habit of always checking for a student
discount before making any significant purchase or even signing up
for online services.
Speaker 1 (29:08):
And the satings aren't trivial, especially for tools that might
be needed for freelancing or skill building exactly.
Speaker 2 (29:13):
The source gives the example of Adobe Creative Cloud software
that's pretty essential for many digital freelancers or students in
creative fields. A student discount on that can easily save
you thirty dollars a month. That's another three hundred and
sixty dollars a year. Right there, again, money that can
go straight towards your financial goals instead of just evaporating.
Speaker 1 (29:32):
Okay, last one step fifteen staying informed about the economy.
This is about shifting from being a passive passenger just
reacting to news, to being a more proactive pilot, understanding
the signs and maybe adjusting course accordingly.
Speaker 2 (29:46):
Yes, being proactive requires having some sense of where things
might be heading. You can't prepare effectively if you're constantly
caught off guard by economic shifts. Being informed allows you
to make strategic adjustments to your own plan, maybe saving
a bit more aggressively, maybe delaying a large purchase rather
than just reacting emotionally to headlines.
Speaker 1 (30:06):
So where should people get this information? What are reliable sources,
avoiding maybe the hype or panic often found elsewhere.
Speaker 2 (30:14):
Stick to professional, generally objective sources. The source suggests following
reputable financial publications like the Wall Street Journal or Bloomberg.
You can also find good authoritative financial commentators and analysts
on platforms like x, but be selective. The key is
to look for data driven analysis, not just opinions or
politically charged takes.
Speaker 1 (30:33):
And what specific things should they be Keeping an eye
on what are the key indicators.
Speaker 2 (30:37):
Monitor the big macroeconomic indicators, things like the unemployment rate
that tells you about the health of the job market,
and definitely watch decisions coming out of the Federal Reserve,
especially regarding interest rates. Those rate decisions directly impact the
cost of borrowing money for mortgages or credit cards and
can influence investment returns. Understanding these trends allows you to
(30:57):
adjust your strategy proactively. For example, if interest rates look
likely to rise, maybe you focus harder on paying down
variable rate debt. If unemployment starts ticking up, maybe you
prioritize boosting your emergency fund even more. This knowledge is
really the capstone. It enables that crucial adaptability hashtag tech
tac tagaboutro Wow.
Speaker 1 (31:18):
Okay, that was an incredibly practical, really thorough deep dive.
Just to quickly recap the core themes, we covered the
absolute necessity of setting up those defensive habits first saving budgeting,
getting aggressive with high interest debt, and then shifting to
those offensive strategies things like diversifying income, building valuable skills,
networking strategically, and crucially starting to invest early, consistently.
Speaker 2 (31:41):
Yeah, and the big takeaway, the core message distilled from
the source material really seems to be this financial preparedness
for gen Z isn't just about hunkering down and surviving
a potential recession. It's actually about building a set of
habits financial lifestyle that fosters deep resilience and adaptability that
allows you not to to weather economic uncertainty, but potentially
(32:03):
to come out stronger on the other side, maybe even
accelerate your wealth building through it. Every single one of
these fifteen steps is a concrete action you can take
to build that financial muscle and free up that all
important cash flow.
Speaker 1 (32:15):
But let's end with this thought. If you, the listener,
are sitting there feeling maybe a bit overwhelmed by all
fifteen points and thinking Okay, I can realistically only focus
on one thing right now to get started. Which of
these fifteen steps offers the absolute highest return on time
investment for a gen Z learner really looking to maximize
their future financial flexibility. Is it that immediate security blanket
(32:36):
of starting the twenty dollars a week emergency fund or
is it maybe the longer term potential of learning a
skill like Python.
Speaker 2 (32:43):
That's a great question, and it highlights that core tension
between immediate security and long term opportunity. While starting that
emergency fund provides crucial immediate psychological relief and defense, and
you absolutely should do it. Arguably, the single highest return
on time investment comes from step ten, building marketable in
demand skills. Why because acquiring a valuable skill set, often
(33:05):
at low or no monetary costs, permanently increases your earning potential.
It provides the best defense against unemployment across economic cycles,
and ultimately, having higher earning power generates the capital that
makes all the other fourteen steps, saving investing, paying off
debts significantly easier to achieve down the road. Investing in
yourselves in your skills, that's probably the one investment with
a truly guaranteed almost unlimited upside potential, and for gen
(33:28):
Z starting there might just be the most powerful first
move
Okay, let's unpack this. We are diving deep today into
well one of the most pressing financial questions out there,
especially for the newest generation hitting the workforce. We're talking
Generation Z, anyone born roughly between ninety seven and twenty twelve.
How do you build financial resilience when frankly, the economy
feels so uncertain, you know, with inflation, rising interest rates,
(00:24):
global stuff. It's made those traditional paths to stability feel
incredibly tricky right from the start.
Speaker 2 (00:31):
It really is a completely different landscape. You have to
acknowledge that the economic world Gen Z is stepping into
it's fundamentally different from what millennials or Gen X saw.
Often you're dealing with more student data, housing market that
seems well, kind of impossible. Yeah, But on the flip side,
there are these unprecedented opportunities too, right in the digital space,
the gig economy. So our mission today is pretty clear.
We've dug into an excerpt from Adidas Wilson over at
(00:53):
Traders suggest it lays out fifteen practical, actionable steps. We're
basically looking for the blueprints, the shortcut, if you will,
to building financial stability and resilience that can sit you
the listener up for the long haul, not just the
next few years, but like decades.
Speaker 1 (01:09):
Yeah, And what jumps out right away is that this
isn't just you know, sit back and wait advice. This
deep dive is really heavy on being proactive building strong
financial habits now, and it seems tailored to the unique
pressures and maybe opportunities this generation has. We're talking defense first,
building that solid safety net before we get into the
more aggressive stuff like investing. So let's kick things off
(01:32):
with the absolute must have step one, the foundation. That
emergency fund. We all kind of know we need one,
but what are the specifics here, especially for a gen
z earner maybe starting out with a smaller salary.
Speaker 2 (01:42):
Right the emergency fund it's basically your financial shield, you know,
against sudden shocks like losing your job. But the goal
needs to feel doable. The source material is very clear,
aim for at least three to six months of essential
living expenses, and essential really is the key word there.
Rent growthries, utilities, minimum debt payments, stuff you absolutely have
(02:03):
to pay. This buffer is what stops a temporary setback
like a layoff, from turning into a total financial disaster
where you're forced into taking on really expensive.
Speaker 1 (02:11):
Debt, and I like that the advice seems designed to
get past that mental block of starting, because looking at
a big number like maybe ten thousand dollars can just
make you freeze up right exactly. That's a huge hurdle.
So the actionable starting point is actually pretty modest. It's
all about consistency. Just set aside, say ten dollars or
even twenty dollars a week. The idea isn't to make
(02:32):
your current life miserable. It's about building the habit, the
muscle memory, and to put that into perspective, saving just
twenty dollars a week that adds up to over one
thousand dollars one thousand and forty dollars in a single year.
For a lot of people, that amount could cover a
month's rent and a pinch or fix a sudden car problem.
It gives you this psychological breathing room that's almost as
(02:52):
valuable as the cash itself. Consistency over amount, that's the
key at the start, really, and you absolutely can't just
let that cash sit there doing nothing, especially with inflation.
Leaving it in a standard savings account from a big
bank earning practically zero interest.
Speaker 2 (03:05):
You're basically letting inflation nibble away your safety net. It's
like throwing away free money. Really. The source strongly suggests
using high yield savings accounts. Hyssays. They mentioned platforms like
Alley or Marcus by Goldman Sachs as examples. These online
accounts offer way better interest rates, I mean sometimes forty
or fifty times higher than the old brick and mortar banks.
(03:26):
The money is still totally accessible, you know, liquid, You
can get it fast if you need it, but it's
actually growing a bit while you're building it up. Take
some of the friction out of saving.
Speaker 1 (03:34):
Okay, so we've got the fun started. Moving on step two.
Making budgeting a cornerstone sounds basic maybe, but for a
generation facing historically high living costs, is that classic fifty
to thirty twenty rule fifty percent needs, thirty percent wants
twenty percent savings debt even realistic when rent might eat
up like forty five percent of your paycheck right off
(03:54):
the bat, how do you handle that friction?
Speaker 2 (03:56):
That's probably the biggest challenge for applying traditional budgeting rules
to gens. Absolutely, when your needs bucket, the fifty percent
is immediately overwhelmed by housing costs. The rule feels broken
from the start, So the fifty to thirty twenty framework
it has to be seen more as an ideal target,
you know, something to aim for, rather than a strict
law you can follow from day one. If rent takes
(04:16):
forty five percent, like you said, that leaves only five
percent for everything else es central growth, yes, utilities, transport.
That realistically means you have to be really aggressive about
shrinking that thirty percent wants category, maybe down to fifteen
percent or even ten percent for a while, and you're
forcing that leftover slice maybe fifteen or twenty percent back
into needs or ideally pushing it towards that twenty percent
(04:37):
goal for savings and paying down debt.
Speaker 1 (04:38):
So it's less of a rigid rule and more like
a temporary adjustment, a structure you work towards as your
income hopefully grows or you find ways to cut costs.
Speaker 2 (04:46):
Precisely, it's a goalpost. Let's take a simple income, say
two thousand dollars a month under the ideal fifty thirty twenty.
That means four hundred dollars needs to go straight to
savings or debt reduction, no questions asked. Your housing costs
make that impossible right now. The source really stresses that
you must review your budget every single month. You can't
(05:07):
just set it and forget it. You have to keep
checking in to make sure the wants that eating out,
the new clothes, the subscriptions aren't creeping back up and
stopping you from hitting that vital savings target.
Speaker 1 (05:16):
And what tools can help with that keeping track and
making those adjustments on the fly.
Speaker 2 (05:20):
Yeah. The source mentions a couple of main types apps
like Yana. You need a budget work on this zero
based idea where every single dollar gets assigned a job.
That's really good for beginners, for gen Z starting out
because it forces you to be intentional with every dollar.
Then you have apps like mint, which are great for
just tracking where your money has already gone, visualizing spending patterns.
Using one of these regularly turns budgeting from this vague
(05:43):
idea into something real time, something actionable. It helps you
tweak that fifty to thirty twenty mix month by month
as things.
Speaker 1 (05:49):
Change, which flows right into the third defensive step, radical
expense reduction.
Speaker 2 (05:55):
Okay, so we've maybe found some money by budgeting, but
now we need to actively hunt down the waste. Because
lean spending habits are key in a potential recession, right, absolutely.
Speaker 1 (06:05):
The main target here is what the source calls subscription creep.
You know, auditing and slashing all those automatic payments, streaming services,
gym memberships, you don't use, software trials, you forgot about
cloud storage.
Speaker 2 (06:19):
All that stuff.
Speaker 1 (06:20):
It adds up incredibly fast, almost without you noticing. It's
a quiet drain on a typical twenty somethings budget.
Speaker 2 (06:26):
Oh yeah, the free trial trap. Sign up forget, and
suddenly you're paying fifteen dollars a month for something you
used once exactly.
Speaker 1 (06:32):
And it seems small, but look at the example they give.
Just cutting two of those fifteen dollars a month subscriptions
saves you three hundred and sixty dollars a year. That
three hundred and sixty dollars isn't hypothetical, it's real cash
freed up. You can funnel that straight into the high
yield emergency fund we talked about, or throw it at
some high interest debt.
Speaker 2 (06:47):
It's not just subscriptions, though, is it. It's also about
those daily habits, especially food that's often the next biggest
expense after rent. Yeah, definitely. The big practical shift suggested
is really focusing on cooking at home rang often instead
of relying on takeout or restaurant meals, which, let's face
it is super common for gen Z. Making your own
meals can literally cost fifty percent to seventy five percent
(07:10):
less than ordering in. Think about it, if you're spending
say one hundred dollars a week on grabbing food out,
you could potentially say fifty to seventy five dollars of
that just by cooking over a year. That's easily into
four figures saved, which directly helps loosen the squeeze from
those high housing costs.
Speaker 1 (07:27):
Okay, so pulling this first part together, what does it
all mean? It means actively finding those hidden dollars, whether
it's three hundred and sixty dollars from cutting streaming services
or potentially thousands from cooking more, and then systematically moving
that money, moving it into the emergency fund or maybe
towards debt. And they mentioned tools like rocket Money specifically
for sniffing out and canceling those unused subscriptions easily. All right,
(07:48):
so we've tightened the bell, found some cash, started building
the safety net. Now let's talk about stopping the leaks.
Dealing with debt that can really drag you down when
the economy gets shaky.
Speaker 2 (07:57):
Right, This next part is all about tackling those high costs, liabilities,
things that can become a real burden, maybe even overwhelming
during an economic downturn, when your income might feel less secure.
It's about reducing financial friction to free up cash flow.
Speaker 1 (08:12):
And we start with step four attacking high interest debt.
This feels urgent when things feel uncertain. This kind of debt,
especially credit cards, it's like an anchor, isn't it actively
pulling you down?
Speaker 2 (08:24):
It really is. The Source hammers this point home. High
interest debt, especially credit card balances, can spiral completely out
of control because of how interest compounds. Credit cards often
have aprs, you know, interest rates averaging twenty percent or
even higher. So prioritizing any debt with an interest rate
above say seven percent, that's probably the single most powerful
financial move a young person can make to free up
(08:46):
their future earnings.
Speaker 1 (08:46):
And how should you go about attacking it? There are
those two main methods people talk about, right, snowball versus avalanche.
Which one does the source lean towards for actually saving money?
Speaker 2 (08:56):
The source focus is squarely on the strategy that saves
you the most money mathmat, which is the avalanche method.
This means you tackle the debt with the absolute highest
interest rate first, hit that one hard, while just making
the minimum payments on everything else. This approach definitely saves
you the most cash and interest over time and gets
you out of debt faster on paper. Now you mentioned
(09:18):
the snowball method paying off the smallest balance first. That
could be great for motivation, giving you quick wins, which
some people really need to stay on track.
Speaker 1 (09:26):
Okay, so avalanche is financially optimal, but snowball might feel
better psychologically for some. The source is pushing for efficiency,
which makes sense for building long term resilience exactly.
Speaker 2 (09:38):
Efficiency is the name of the game here, and let's
see what that looks like. They give a good example.
Say you have a two thousand dollars credit card balance
sitting at twenty percent interest. If you just pay an
extra one hundred dollars each month towards it beyond the
minimum over a year, that saves you over four hundred
dollars in interest compared to just sticking with the minimums.
That's four hundred dollars back in your pocket, real money.
(09:58):
You can then use for other goals like hitting the
next debt on your list or boosting your savings.
Speaker 1 (10:03):
Okay, makes sense. Step five is about protecting your credit score.
This number can feel kind of abstract, but it has
huge real world consequences, doesn't it, especially when lenders tighten
up during a recession.
Speaker 2 (10:15):
Oh? Absolutely huge. A strong credit score is your key
to getting good terms on almost everything financial. We're talking
lower interest rates on car loans, getting approved for an
apartment rental, sometimes even affecting your insurance premiums. During a recession,
credit generally gets tighter, lenders become more cautious, so having
a good score becomes even more critical. The specific target
(10:36):
recommended in the source is to aim for a score
above seven hundred that puts you solidly in the good
to excellent range, marking you as a low risk borrower.
Speaker 1 (10:45):
And what are the main habits to build and maintain
that score, especially if you're younger and maybe just starting
to build a credit history.
Speaker 2 (10:53):
Two things are absolutely critical. First, and this is the
biggest one, pay every single bill on time, every single month.
Payment histree makes up about thirty five percent of your score.
It's huge. Second, keep your credit card balance is low
relative to your limits. This is called your credit utilization ratio.
You want to keep it below thirty percent. Lenders see
high utilization like maxing out your cards, as a sign
(11:14):
of financial distress, and they.
Speaker 1 (11:15):
Give an example of what that thirty percent looks like practically.
Speaker 2 (11:18):
Yep, if you have a credit card with say a
five thousand dollars limit, you'd want to keep your balance
under fifteen hundred dollars, ideally fousand dollars thirty cents fifteen
hundred dollars. But really even lower is better, closer to
ten percent if you can manage it. The key is
you don't have to guess. You need to monitor it.
Platforms like credit Karma lets you check your score for free.
You can see how you're doing, track your progress, and
(11:41):
understand how your actions are impacting your score in real time.
Speaker 1 (11:44):
All right, last one in the section step six. This
tackles the elephant in the room for so many in
gen Z student loan repayment. That average debt figure is
pretty staggering.
Speaker 2 (11:53):
It really is. The context is sobering. The average gen
Z graduate is looking at around thirty thousand dollars in
student loan debt. Now imagine a recession hits, maybe your
job prospects dim or your hours get cut. That fixed
monthly loan payment can suddenly become incredibly difficult, even impossible
to manage. So the strategies recommended focus on reducing that
monthly burden. Explore things like income driven repayment IDR plans,
(12:17):
which are just your payment based on your current income
and family size, or look seriously into refinancing options with
private lenders if you have good credit and stable income.
Speaker 1 (12:25):
What's the difference there? Because IDR plans and refinancing seem
to solve different problems, don't they.
Speaker 2 (12:30):
They really do. Refinancing is usually about getting a lower
interest rate. This saves you money over the long term,
but it often requires you to have a solid income
and a good credit score already. Income driven plans, on
the other hand, are focused on lowering your monthly payment
right now. This is super helpful during periods of financial instability,
but the trade off is you might end up paying
(12:52):
more interest over the total life of the loan because
you're paying it off slower. The source suggests weighing both
options based on your immediate cash flow needs versus your
long term savings goals.
Speaker 1 (13:02):
Can refinancing actually make a noticeable debt in that thirty
thousand dollars average debt.
Speaker 2 (13:06):
Yes, a really significant measurable difference. The example given is
refinancing a thirty thousand dollars loan from say six percent
interest down to four percent over a standard ten year repayment.
That saves you two thousand dollars in interest payments. That's
two thousand dollars extra cash flow, which again is critical
when things feel unstable. It's also why staying plugged into
(13:28):
official sources like student a dot gov is so important,
keeping track of any relief measures, forgiveness programs, or changes
to repayment plans. If you connect all this back to
the bigger picture, reducing those fixed monthly costs like high
loan payments, it frees up that vital cash flow. That
flexibility is really what separates people who are prepared from
those who feel completely overwhelmed when the economy shifts.
Speaker 1 (13:50):
Okay, so we've built the foundation in that safety net.
We've started tackling the debt friction. Now it's time to
shift gears a bit move towards offense. This next part
is about strategies to protect and actually grow your wealth.
Turning those defensive savings habits into something more like aggressive growth.
Step seven is all about income diversification, right.
Speaker 2 (14:08):
The basic idea here is pretty simple but powerful. Relying
on just one paycheck one source of income is inherently risky,
especially you know when companies start talking about layoffs during
economic downturns. Having multiple income streams acts as that crucial buffer.
If one stream slows down or disappears, you hopefully have
others to rely on. It reduces your vulnerability.
Speaker 1 (14:30):
Yeah, and gen Z seems uniquely positioned for this, doesn't it,
given how comfortable they generally are with digital platforms and
the whole gig economy thing.
Speaker 2 (14:38):
Absolutely, they can tap into immediate cash flow options like
driving for Uber, delivering for DoorDash, or doing odd jobs
via task grabit. Those are great for quick supplemental income
when you need it. But maybe more strategically, they can
monetize specific skills. They have skills that are in demand
through freelancing. We're talking platforms like upwork or fiver. If
you have skills in writing, graphic design, managing social media,
(15:01):
even basic website updates, businesses all over the world need
those skills, often on a project basis.
Speaker 1 (15:06):
What kind of real money are we talking about here?
What's the potential earnings that might motivate someone to spend
their evenings doing freelance work instead of you know, relaxing.
Speaker 2 (15:16):
Well, even a gen Z freelancer with fairly basic graphic
design skills, for example, could potentially earn somewhere between twenty
and fifty dollars an hour. Now, this side income might
not replace a full time job, not necessarily, but earning
an extra, say one hundred and two hundred dollars a week,
that could directly fund that four hundred dollars monthly savings
goal we talked about earlier, or it could go towards
(15:37):
aggressively paying down that high interest debt. It literally turns
your spare time into a predictable cash generating machine.
Speaker 1 (15:44):
Okay, that leads nicely into step eight, starting to invest early.
This is where the real long term wealth building happens. Right,
even if the market feels choppy or uncertain. Now, time
is the biggest advantage this generation has.
Speaker 2 (15:56):
Yes, the core concept here, the one you absolutely have
to grasp, is the power of compound interest or compound growth.
Your investments don't just grow, The growth itself starts to
generate more growth. It snowballs over time, and the money
you invest today in your early twenties perhaps has potentially
forty or fifty years to compound and grow. So even
(16:17):
if the economy feel shaky right now, the basic strategy
doesn't change. Start investing as soon as possible, and the
recommendation is to start with low cost diversified index funds
or ETFs.
Speaker 1 (16:27):
Why index funds, specifically, why not try picking the next
big winning.
Speaker 2 (16:31):
Stock because index funds dramatically reduce your risk. Instead of
betting on the success or failure of one single company,
which is incredibly hard to predict. And index fund tracks
a broad market index like the S and P five hundred,
you're essentially betting on the overall long term growth of
the economy or a large sector of it. They're cheap
to own, easy to understand, and historically they provide pretty
reliable returns over the long run. You can easily buy
(16:54):
them through user friendly platforms like Vanguard or Fidelity.
Speaker 1 (16:57):
And here's where it gets really interesting, maybe even mind blowing.
The sheer power of starting now versus waiting just a
few years.
Speaker 2 (17:05):
Yes, the compounding example they use is powerful. If you'd
invest just one hundred dollars a month. Maybe that's achievable
by cutting some expenses, or from that side, hustle into
an S and P five hundred index fund. Assuming it
delivers the historical average return of around seven percent per year,
that relatively small, consistent investment could grow to over fifteen
(17:25):
thousand dollars in just ten years. Think about that. Fifteen
thousand dollars is often half the average student loan burden
for gen Z. That's the massive difference between starting your
early twenties versus waiting until your thirties. You lose an
entire decade of that exponential growth and you can never
really get that time back.
Speaker 1 (17:41):
But we have to be realistic too. The gen Z
investment landscape is well, kind of wild, sometimes influenced heavily
by social media things like Memestock's Crypto investing when things
feel uncertain can seem really risky. What safety tips are
crucial for beginners who might be tempted by those high risk,
high reward plays.
Speaker 2 (17:57):
Yeah, that's a really important point. There. Strongly cautions against
using risky single stock bets or highly speculative assets like
crypto for your foundational wealth building, especially not during boll
little markets. While those things can seem exciting, they should
probably be limited to a very, very small part of
your overall portfolio. Think of it as play money you
(18:19):
can genuinely afford to lose completely. For your main serious
investment capital, consider using robo advisors like Betterment. These platforms
automatically build and manage a diversified portfolio for you based
on your goals and risk tolerance. They handle the rebalancing
and keep you disciplined, which is key when market noise
gets loud.
Speaker 1 (18:37):
Okay, solid advice. Step nine, living below your means. This
one feels maybe the hardest because it's less about a
specific action and more about a mindset shift right, avoiding
that trap of lifestyle.
Speaker 2 (18:48):
Inflation exactly, It's about consciously choosing a lifestyle that allows
for ongoing financial flexibility. Lifestyle inflation is that almost unconscious
tendency we all have as our income goes up. Maybe
you get a raise or a better job, Our spending
automatically expands to meet it. You upgrade the apartment, get
a nicer car, eat out more often. The goal here
(19:09):
is to intentionally create a gap between what you earn
and what you spend.
Speaker 1 (19:13):
So what's the practical way to apply that. Let's say
you finally get that first significant raise, what should you
actually do?
Speaker 2 (19:19):
The advice is really concrete. When you get a raise,
make a conscious commitment to save or invest at least
fifty percent of that increase. Don't just let your spending
naturally absorb the whole amount. So if you get an
extra five hundred dollars a month, maybe only allow two
hundred and fifty dollars of that to flow into your
regular discretionary spending. The other two hundred and fifty dollars
goes straight to savings, investments, or extra debt payments. This
(19:43):
prevents your baseline cost of living from constantly ratcheting up,
which is exactly what eats away your financial flexibility when
times get tough. Ultimately, it comes down to being mindful
about your spending, really asking yourself that question before you
buy something significant, do I actually need this or do
I just want it. If you can build the habit
of saving more aggressively during the good times by consciously
(20:05):
resisting unnecessary upgrades, you'll be far better protected and much
more adaptable if your income takes a hit later on.
Speaker 1 (20:12):
Right, So, economic uncertainty usually means a tighter, more competitive
job market. This whole next section is focused on investing
in yourself, in your human capital to basically make yourself
more employable and keep your income stable no matter what
the broader economy is doing.
Speaker 2 (20:25):
And this is where the return on investment can be massive, truly.
Starting with step ten, building marketable in demand skills. Why
is this maybe even more critical for gen Z compared
to previous generations.
Speaker 1 (20:38):
Well, because in a tough job market, employers prioritize people
who bring skills that are valuable right now and ideally
valuable across different industries. You need versatility. It's not enough
just to know your specific job. You need transferable skills.
The source specifically calls out things like coding, data analysis,
digital marketing. These are skills that business this is pretty
(21:00):
much always need, even if consumer spending slows down in
other areas.
Speaker 2 (21:04):
They allow you to pivot right if your main industry
gets hit hard, Having those skills might open doors elsewhere.
Speaker 1 (21:09):
And the good news for gen Z is that getting
these skills doesn't necessarily mean going back for another expensive degree.
The barriers are lower now.
Speaker 2 (21:17):
That's exactly right. Traditionally, acquiring these skills might have meant
expensive courses or degrees, but the source points out there's
a wealth of free or low cost options available now.
You can use platforms like code Academy for learning to code,
or look into Google's career certificates for things like data
analytics or IT support. These platforms offer training that's often
(21:39):
recognized by industry, and you can often complete them without
taking on huge amounts of new debt. For someone maybe
already dealing with student loans, that's a game changer. You're
boosting your skills without digging a deeper financial hole.
Speaker 1 (21:52):
And the potential payoff for putting in that effort learning
those skills can be pretty substantial.
Speaker 2 (21:57):
Yeah. The example they give is really compelling. Learning a
specific in demand skill like the programming language Python that
can directly open doors to tech jobs with median salaries
often ranging from seventy thousand dollars up to one hundred
thousand dollars or more. That's a potentially massive immediate boost
to your earning potential all from investing time and learning
(22:19):
through a certificate or online course, maybe even a free one.
It fundamentally raises your income sealing, which is arguably the
best defense against any economic downturn.
Speaker 1 (22:28):
Okay, skills are key. Then Step eleven is about strategic networking,
building those professional connections before you actually need them. This
can feel kind of awkward, especially for younger folks, but
the source says it's.
Speaker 2 (22:39):
Crucial, absolutely crucial. Your professional network isn't just about finding mentors,
though that's valuable too. It's often about getting insider knowledge
on job openings, sometimes before they're even publicly posted, especially
when the job market is tight and official openings get
flooded with applications. Many many jobs are filled through referrals.
If companies aren't advertising widely, they're often hiring people recommended
(23:02):
by their current employees.
Speaker 1 (23:03):
So what's the difference between just adding random people on
LinkedIn and actually building strategic relationships.
Speaker 2 (23:09):
It's all about intentionality. The methods suggested are a mix. Definitely,
attend industry events, whether they're virtual or in person. Actively
participate in relevant LinkedIn groups for your field. Engage professionally
on platforms like x formerly Twitter. But it's not just
about passively collecting contacts. It's about adding value where you can,
(23:31):
asking thoughtful questions, sharing relevant information, demonstrating your interest and
competence so that When someone in your network does hear
about an opportunity, you're someone they think.
Speaker 1 (23:40):
Of, and they even suggest a measurable goal for this,
which helps make it less abstract.
Speaker 2 (23:44):
Yeah, the recommendation is to try and meaningfully connect with
maybe ten new professionals in your field each month. That
sounds like a lot, but even sending a few thoughtful,
personalized messages or engaging in group discussions adds up. That
kind of focused effort can significantly expand your valuable network
over a year. And it brings up that important question,
(24:05):
doesn't it. How many jobs are really found through referrals
versus just applying Online Studies consistently show referrals have a
much higher success rate. So networking isn't just nice to
have its essential career insurance, especially during uncertain times.
Speaker 1 (24:20):
Makes sense. Finally, in this career section, step twelve talks
about exploring recession proof careers. This is about maybe aligning
your long term path with industries known for stability rather
than chasing explosive but potentially volatile growth.
Speaker 2 (24:34):
Right. The core idea is reducing your personal risk of
unemployment by choosing fields that tend to remain stable or
even grow when overall consumer spending dips, think about sectors
that provide essential services. The source points to fields like healthcare, education,
and cybersecurity, as generally stable people always need medical care,
(24:55):
kids always need schooling, and businesses always need to protect
themselves from digital threats regardless of the broader economic climate.
These sectors are less sensitive to economic cycles than say,
retail or luxury goods.
Speaker 1 (25:06):
But let's play Devil's advocate for a second. Doesn't choosing
stability sometimes means sacrificing the potential for that really high
salary growth you might find and say a high risk
tech startup.
Speaker 2 (25:17):
That's often the perceived trade off. Yes, and the source
isn't saying everyone must go into these fields. It's advising
prioritizing stability if your main goal is resilience during uncertain times. Sure,
working in education might not offer the same potential salary
ceiling as being an early employee at a unicorn startup,
but it likely offers much more consistent, reliable income during
(25:39):
a recession for someone whose top priority is weathering an
economic storm. The dependability of a job in healthcare, like
being a certified nursing assistant might be more valuable than
the high risk, high reward nature.
Speaker 1 (25:52):
Of a startup, and for someone who is maybe already
working but feeling nervous about their industry and wants to
pivot quickly towards one of these more stable fields, what
are some practical options.
Speaker 2 (26:02):
Pursuing specific, relatively quick certifications is often the key. The
source gives a great practical example becoming a Certified Nursing
Assistant CNA. A CNA program can often be completed in
just four to twelve weeks. It's relatively low cost compared
to a full degree, and it provides immediate entry into
jobs in the very stable healthcare sector. With median pay
(26:22):
around thirty five thousand dollars annually, it's a fast track
to securing employment in a field likely to remain in demand.
Speaker 1 (26:28):
All Right, we've covered the defensive moves, tackling debt, boosting intome,
and shoring up career resilience. This final part, Part five,
is all about gaining an edge through knowledge and leveraging
some unique advantages available especially to younger people. Step thirteen
is investing in financial education itself.
Speaker 2 (26:44):
Yeah, knowledge really is power when it comes to finance,
isn't it. Understanding the basics and even some of the
complexities leads directly to making better, less emotional decisions. When
you understand why diversification matters, or how compound interest actually
works mathematically, or the relationship between risk and reward, you're
less likely to panic and sell when the market dips
(27:06):
or chase unrealistic returns based on hype. It helps you
stick to your long term strategy.
Speaker 1 (27:11):
And what specific resources does the source recommend for gen
z to get up to speed? Maybe moving beyond just
classroom theory.
Speaker 2 (27:18):
Well. For books, they suggest titles like The Millionaire next Door.
Books like that are great because they often focus on
the actual habits of people who build wealth steadily over time,
not just on stock market wizards or lottery winners. It's
about behavior. For podcasts, they mentioned shows like The Money
with Katie Show as an example. Resources that provide practical,
relatable advice on things like budgeting, saving, and getting started
(27:41):
with investing in a way that feels accessible.
Speaker 1 (27:43):
And if buying books or paying for courses is a
stretch right now, there are solid free options too right
to build up that financial knowledge base.
Speaker 2 (27:51):
Oh, absolutely don't overlook free resources. Platforms like Coursera or
con Academy offer high quality courses on personal finance, investing,
base economics all for free. Think of it like building
a knowledge mode around your finances. The more you understand,
the better protected you are against making costly mistakes or
falling for bad advice.
Speaker 1 (28:11):
Okay, Step fourteen is a really tactical one. Leveraging student
discounts and benefits. This is a unique advantage, often time limited,
that many in gen z still have, and they should
absolutely milk it for all it's worth.
Speaker 2 (28:24):
Yes, the concept is super simple. If you still qualify
for student status, you likely have access to a ton
of discounts that can directly free up cash. Every dollar
saved through a discount is a dollar you can immediately
redirect towards their emergency fund, paying down debt, or investing.
It's like an instant, guaranteed boost to your cash flow
that often disappears the moment you graduate. Don't leave that
(28:45):
money on the table.
Speaker 1 (28:46):
Where should people look for these? Beyond just the campus bookstore, Check.
Speaker 2 (28:50):
Out dedicated platforms like Unidas or student Beans. These sites
aggregate discounts on tons of stuff tech, software, clothing, travel, entertainment.
Get in the habit of always checking for a student
discount before making any significant purchase or even signing up
for online services.
Speaker 1 (29:08):
And the satings aren't trivial, especially for tools that might
be needed for freelancing or skill building exactly.
Speaker 2 (29:13):
The source gives the example of Adobe Creative Cloud software
that's pretty essential for many digital freelancers or students in
creative fields. A student discount on that can easily save
you thirty dollars a month. That's another three hundred and
sixty dollars a year. Right there, again, money that can
go straight towards your financial goals instead of just evaporating.
Speaker 1 (29:32):
Okay, last one step fifteen staying informed about the economy.
This is about shifting from being a passive passenger just
reacting to news, to being a more proactive pilot, understanding
the signs and maybe adjusting course accordingly.
Speaker 2 (29:46):
Yes, being proactive requires having some sense of where things
might be heading. You can't prepare effectively if you're constantly
caught off guard by economic shifts. Being informed allows you
to make strategic adjustments to your own plan, maybe saving
a bit more aggressively, maybe delaying a large purchase rather
than just reacting emotionally to headlines.
Speaker 1 (30:06):
So where should people get this information? What are reliable sources,
avoiding maybe the hype or panic often found elsewhere.
Speaker 2 (30:14):
Stick to professional, generally objective sources. The source suggests following
reputable financial publications like the Wall Street Journal or Bloomberg.
You can also find good authoritative financial commentators and analysts
on platforms like x, but be selective. The key is
to look for data driven analysis, not just opinions or
politically charged takes.
Speaker 1 (30:33):
And what specific things should they be Keeping an eye
on what are the key indicators.
Speaker 2 (30:37):
Monitor the big macroeconomic indicators, things like the unemployment rate
that tells you about the health of the job market,
and definitely watch decisions coming out of the Federal Reserve,
especially regarding interest rates. Those rate decisions directly impact the
cost of borrowing money for mortgages or credit cards and
can influence investment returns. Understanding these trends allows you to
(30:57):
adjust your strategy proactively. For example, if interest rates look
likely to rise, maybe you focus harder on paying down
variable rate debt. If unemployment starts ticking up, maybe you
prioritize boosting your emergency fund even more. This knowledge is
really the capstone. It enables that crucial adaptability hashtag tech
tac tagaboutro Wow.
Speaker 1 (31:18):
Okay, that was an incredibly practical, really thorough deep dive.
Just to quickly recap the core themes, we covered the
absolute necessity of setting up those defensive habits first saving budgeting,
getting aggressive with high interest debt, and then shifting to
those offensive strategies things like diversifying income, building valuable skills,
networking strategically, and crucially starting to invest early, consistently.
Speaker 2 (31:41):
Yeah, and the big takeaway, the core message distilled from
the source material really seems to be this financial preparedness
for gen Z isn't just about hunkering down and surviving
a potential recession. It's actually about building a set of
habits financial lifestyle that fosters deep resilience and adaptability that
allows you not to to weather economic uncertainty, but potentially
(32:03):
to come out stronger on the other side, maybe even
accelerate your wealth building through it. Every single one of
these fifteen steps is a concrete action you can take
to build that financial muscle and free up that all
important cash flow.
Speaker 1 (32:15):
But let's end with this thought. If you, the listener,
are sitting there feeling maybe a bit overwhelmed by all
fifteen points and thinking Okay, I can realistically only focus
on one thing right now to get started. Which of
these fifteen steps offers the absolute highest return on time
investment for a gen Z learner really looking to maximize
their future financial flexibility. Is it that immediate security blanket
(32:36):
of starting the twenty dollars a week emergency fund or
is it maybe the longer term potential of learning a
skill like Python.
Speaker 2 (32:43):
That's a great question, and it highlights that core tension
between immediate security and long term opportunity. While starting that
emergency fund provides crucial immediate psychological relief and defense, and
you absolutely should do it. Arguably, the single highest return
on time investment comes from step ten, building marketable in
demand skills. Why because acquiring a valuable skill set, often
(33:05):
at low or no monetary costs, permanently increases your earning potential.
It provides the best defense against unemployment across economic cycles,
and ultimately, having higher earning power generates the capital that
makes all the other fourteen steps, saving investing, paying off
debts significantly easier to achieve down the road. Investing in
yourselves in your skills, that's probably the one investment with
a truly guaranteed almost unlimited upside potential, and for gen
(33:28):
Z starting there might just be the most powerful first
move
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