“It hit me hard. Very difficult. I had to save. I had to dive into my 401 (k), ”said Matt Burns, an Austin, Texas resident on leave from his job at a company that hosts corporate events.
“These bills come like clockwork,” said Mr. Burns, 41. “I’m paying $ 600 a month in child support and I’m still paying rent and utilities and everything.” He estimated that he had drawn about $ 10,000 by first using up the few thousand dollars he had in savings before using CARES law to stand out from his 401 (k).
Now his work is back on track, but Mr. Burns is annoyed that he missed the meteoric rise in the stock market since its low in spring 2020. “I need to get my nest egg back,” he said.
A survey conducted by Bankrate.com in May found that the pandemic caused more people to prioritize saving for emergencies – but the loss of income many have seen over the past year makes the leap from intent to act to yawning Gap. For young adults already on the brink of financial difficulties, any stumble can be enough to plunge them into debt.
“The biggest thing about young people is that many of them were never really taught about saving, budgeting, and building credit, which is so important,” said Christina Pawlak, credit counselor with the Consumer Credit Counseling Service of Maryland and Delaware. “They have no emergency savings and put everything on credit cards they can’t pay, which ruins their credit.”
One of Ms. Pawlak’s clients is Cristal Duarte, a 31-year-old Bronx resident who does one full-time and two part-time jobs.
Ms. Duarte said she held herself financially responsible, but the cost of her father’s death from aggressive cancer two years ago and his desire to be buried in his native Dominican Republic plunged her into credit card debt of nearly $ 30,000 Dollar. It became a struggle to stay one step ahead of interest charges as some of their cards had annual interest rates as high as 29 percent. “You ruined my interest,” she said.