During her lecture at the University of Chicago yesterday afternoon, which she presented as "The Inconvenient Truths of Finance" New York Times Best-Selling author Beth Kobliner introduced what she calls the "Suri Cruise Moment" - in which she stated that more young people in their twenties and thirties can identify Suri Cruise (TomKat's daughter) than know what the interest rate on their credit card is. Frightening. Ms. Kobliner provided several other sobering statistics to the crowd of roughly 30 undergraduate and graduate students, including:
*More adults under the age of 35 now spend 20% of their income paying off credit card debt than ever before.
*If you take inflation into account, people in their twenties and thirties are actually making less income today than our parents did at our age.
*The unemployment rate for individuals aged 20 - 24 is at 14% - higher than it's ever been since anyone's been tracking this stuff.
So what's one to do, faced with these daunting statistics? Kobliner also has some tips and tricks all of us, including what can sound like commonsense, but actually makes good financial sense. Read on if you're worried about your financial situation (and that's pretty much everyone these days):
*Preserve your credit score: According to Kobliner, missing one bill payment, on your credit cards, your car payments, your bills, can negatively affect your credit score almost immediately - so sign up for automatic payments for your regular bills and be sure to always pay them on time.
*Don't carry a balance on your credit card: Here's the example that Kobliner shared. Say you have a $1000 balance on your credit card, and each month you pay only the minimum payment. If you do that, it will take you 13 YEARS and cost you an additional $850 to pay off that original $1000.
*Save: Set up an automatic withdrawal system that takes money out of your checking account and puts it into saving. Even if it's $5, $25, $75 - save something everything single month.
*Don't spend what you can't afford: Sounds simple - but living on credit is what got us into this mess in the first place (ok, it's more complicated than that, but you get what I'm saying).
Looking for more tips on personal finance? Check out http://www.bethkobliner.com/ for more info from Beth and links to other financial planning websites.
Are you worried less about your personal finance, and more about actually having a paycheck after you graduate? Come into CAPS for an appointment (call 773-702-7040 to schedule) or attend one of our upcoming programs about finding jobs and internships in a recession. Check out the CAPS calendar for dates, times and locations.
Questions, comments, feedback or ideas? Post them here.