finance

Economic Changes that Significantly Affect Personal Finance

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With the current worldwide events affecting the global economy, many people wonder what changes will happen next. There are job shortages, changing economic trends, and increasing unrest and disappointment among global citizens. The economy has always been volatile, but with how things change rapidly, it’s difficult to predict what may happen next.

However, throughout history, be it recent or ancient, civilisations have always tackled economic problems. And with the increasing awareness of personal finance and its effect on individuals, people of all ages are beginning to take actions into their own hands. Of course, potential actions are still limited by the current economic state, thus making the analysis of the connections of events and situations important.

Below are some predictions and trends observed by experts. Learn how they can potentially affect both the national wealth of a country and the individual wealth of its citizens.

For the Younger Generation

The younger generation is saddled with the responsibility of lifting the economy. In the last few years, they have bore witness to multiple “economic depression” and the rapid changes in trends. From the development of the internet industry to changes in the job market, here are some of the changes that await the younger generation.

Feelings of Uncertainty in Terms of Employment

employee

The turn of the century has given fruit to the idea that staying in one company for a lifetime isn’t as feasible as everyone thought it initially was. Gone are the days when companies keep employees for years, and the global job market has shifted to a more temporary or project-based format. This leads to many new graduates feeling uncertain when it comes to gaining employment and keeping themselves employed.

Gaining Independence Will Have to Wait

Moving out and living the young professional lifestyle has become a metaphorical rite of passage amongst many. However, this has to wait as the unreliable economy and job market don’t allow young professionals to earn and save enough money to sustain themselves. More and more new graduates are opting to stay with their parents, as the combined financial capabilities of all the household members are significantly more than one person trying to survive on their own.

Financial Uncertainties

Price inflation and the weakening of the currency aren’t helping the situation either. Many young professionals often complain about low wages that are not enough to sustain a meagre lifestyle. They can’t be blamed either, as research has shown that the salary increase to price inflation remains rather skewed. Perhaps when things settle in the near future, the buying power of younger millennials and older Gen Zs will come.

For the Working Class

To those who’ve been in the workforce for quite some time, the changes are both detrimental and predicted. After years of a downward trend with sudden spikes and increases, many work class folk aren’t particularly surprised by the current situation. Below are some of its effects on the future of tenured workers.

Increased Awareness of Financial Independence

finance

Books related to personal finance, investments, and the stock market are among the things that saw an increase in proliferation. People want to attain financial independence and are putting in the legwork to learn it. People are making technical, financial decisions outside of a financial professional, and perhaps it’s for the better. Improving credit scores, going through refinancing, opting for debt consolidations. These are fast becoming common knowledge, and if the current financial situation remains the same, then individuals will “pull themselves up by the bootstraps” even more.

Tighter Budget Cuts That Everyone Feels

Major businesses and companies have downsized significantly over the past few years. Even companies whose trajectory doesn’t seem to decline have opted for downsizing to remain competitive. On the individual end of things, more and more people are switching their lifestyle from a consumerist one to a more meagre approach. Money-saving tips and DIY are all the rage, thanks partly to their affordable nature and non-reliance on outside services that may or may not require money. Everyone is on a budget cut, from small families to large companies.

Concerns on Job Security

Concerns over job security are now a point of discussion among people of all generations. As mentioned in the last point, tenured workers also have to contend with job security as they’re often among those who are hit by the downsizing measures many companies employ. Many find it difficult to find newer jobs, similar to how the new graduates find it difficult to find their first job. The job market has changed drastically, requiring new skills while offering a lower rate.

With these ideas in mind, it becomes necessary that one checks and focuses on their personal finances. Doing so ensures that you aren’t impacted financially.

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