Boiling job market means young Americans can boost their savings

The first months of the COVID-19 pandemic did not exactly inspire the confidence of the American public in the American economy, but gradually things have improved in some sectors.

Many millennials and millennials even became more financially confident during the pandemic, according to a OnePoll survey. And now, in part due to a massive labor shortage, momentum is still on their side. They are witnessing an unprecedented job market, where even those with little or no work experience carry more weight than ever before. Some companies offer applicants higher salaries than in previous hiring periods, along with signing bonuses and other incentives.

An important aspect of this great opportunity for young workers is that it gives some the luxury of increasing their savings rate and becoming more consistent with their financial plan for the present and the future. The OnePoll survey reported that the financial confidence of younger generations of adults has increased in part thanks to better saving habits they acquired out of necessity during the pandemic. Some said they started budgeting for the first time, and in addition to monitoring their spending habits, they used some of their increased savings to pay off student loans and other debts.

It is important that we steer our young adults into good saving and investing habits now while they have the capacity to earn increased income. And it’s encouraging to see that many young Americans are focused on maintaining their savings and learning to adapt in order to prioritize building a stable financial future. This job market may not always be reality, so it’s good to build a treasure chest when given the chance.

Here are some tips to get them started:

  • Invest when you are young. You don’t have to wait to invest until you have a lot of money. The power of compound interest makes time your best ally. When you start early, you can accumulate much more wealth with less capital invested than if you start investing later. In fact, you can start small – $ 50 to $ 100 per month – and increase the amount as you earn more. Investing regularly and automatically makes your money work harder than you do. The advantage of starting an investing program before you start making a lot of money is that you learn to live on less.
  • Sharpen your money management. I cannot stress enough the importance of budgeting. Young people – people of all ages, for that matter – start having financial problems and putting their financial futures in jeopardy when they go crazy about credit cards and start living beyond their means. Sticking to a monthly budget can save you from such difficulties. You will see areas of spending that you can reduce to save more. It’s like giving yourself a raise.
  • To diversify. Don’t invest all of your money in a big stock tip that you read or received from a friend. Spread it over an investment portfolio, which is less likely to lose money. The market will go up and down, but the way to protect your portfolio is to have some investments performing while others don’t. The easiest way to do this is to use a mutual fund or an exchange traded fund (ETF).

At some point, you’ll want to establish a strategic asset allocation. There are three basic types of assets: stocks, bonds, and cash instruments (such as CDs and money market accounts). The biggest risk is stocks – a greater chance of losing money for the higher potential gains – followed by bonds, then cash. As a general rule, the younger you are the more you will benefit from a higher allocation to stocks, but you may also want to allocate some to bonds and cash. Strategically, it makes sense to maintain a balanced mix of stocks, bonds and cash.

  • Establish an emergency cash fund. This way, if large expenses arise, such as an auto repair, you won’t have to dip into your investments to pay for them. The longer your money is invested, the better its growth potential (and the less likely you are to lose it).
  • Investing tax deferred. Even if your employer doesn’t offer a retirement savings account, you can open your own. Anyone with earned income under age 50 can contribute up to $ 6,000 per year to an Individual Retirement Account (IRA), in which you choose which securities to invest. With a “traditional” IRA, you can deduct this amount from your current income tax, and the account grows tax-deferred until the money is withdrawn. If you open a Roth IRA, you don’t get the tax deduction, but you won’t have to pay tax on withdrawals (as long as you don’t withdraw money for at least five years from your first contribution).

Whether you’re a high school or college graduate, or just transitioning with some free time, don’t get too caught up in the pursuit of money. Pursue your interests and the money will likely follow. Invest the time to learn about the jobs that interest you.

And like the importance of having a diversified portfolio, so have a balanced life. Invest in meaningful friendships and useful hobbies that develop healthy habits and expose you to new opportunities.

Start now and your rewards will increase over time. Your career, friends, family and activities are all seeds that you can plant now for a secure and happy future.


Chris Murray ( is the founder of Murray Financial Group, Inc. and the author of The Financial Protector. Murray started his business in 1995 to help individuals and families overcome the challenges of creating a stable financial foundation. He has passed the Series 65 Securities Exam and is licensed in Maryland Life and Health Insurance. Murray has been recognized nine times as best financial planner by Frederick Magazine and hosts a popular 24-year-old radio show, Your Financial Editor, which has won numerous awards.

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