Latest news with #ChrisHeerlein
Yahoo
27-05-2025
- Business
- Yahoo
6 Financial Traps Middle Class People Fall Into in Their 20s
Your 20s are a wild ride. You're figuring out how to adult, maybe landing your first 'real' job, juggling student loans and trying to fit the occasional impulse Amazon buy into your budget. Learn More: Try This: You might feel like you're making progress, especially if you're not living paycheck to paycheck. But even middle-class folks with steady incomes can fall into some sneaky financial traps when they're young that don't show up on their bank statements until years later. Here's a look at the ones to watch out for — before they quietly drain your future wealth. According to Chris Heerlein, CEO of REAP Financial, one prevalent financial trap for 20-somethings is living beyond their means. It's easy to get caught up in a lifestyle of consumerism, especially with the influence of social media, which often shows a curated version of success. Many individuals in their 20s may even rely on credit cards or loans to fund unnecessary purchases, like expensive dining out, luxury clothing or gadgets. Heerlein noted the immediate gratification of buying what you want can quickly spiral into debt that becomes harder to manage as time goes on. 'My advice here is to live within your means by creating a budget, tracking your spending and prioritizing saving over consumption.' Remember: It's important to build a cushion with an emergency fund and focus on paying down high-interest debts, like credit card balances, before spending on non-essentials. For You: 'Too many young adults neglect to save for a rainy day, thinking they will not have any unexpected expenses,' said Kevin Shahnazari, founder and CEO of FinlyWealth. A January U.S. News survey found that 42% of Americans don't have an emergency fund, with nearly as many (40%), saying they couldn't cover a $1,000 emergency expense with cash or savings. Even modest financial shocks can lead to debt accumulation or delayed payments without a cash cushion. Ideally, a three- to six-month cushion of living costs should be saved before investing or purchasing big-ticket items. Shahnazari said being uninformed about credit, which can lead to maxing out credit cards or paying only minimum payments, can result in negative credit scores and interest payments. To use credit wisely, he said one must keep credit balances low, pay them in full when feasible and check credit reports to catch errors or fraud before they become big problems. You can access your credit report for free weekly at or annually through the major credit bureaus — Experian, Equifax and TransUnion. This is a major misstep. Saving for retirement may feel abstract in your 20s, but compounding growth over the long term is incredibly potent, said Shahnazari. Delaying 401(k) or IRA contributions will cost you thousands in the long term. Saving small, consistent contributions can make you a millionaire in the long term. Student loan debt is a fact of life for many, but Shahnazari said sliding into minimum payments without a payoff strategy can lengthen debt terms unnecessarily. Keep in mind that refinancing, income-driven repayment or accelerated payoff plans can be money- and stress-saving. Many 20-somethings lack the financial literacy they need to make smart choices about loans, investing and taxes. Taking the time to learn about finance — through classes, books or planners — empowers you to make smarter money decisions. The solution to evading these traps, Shahnazari explained, is careful money management, planning and continued money education. 'The earlier adults get established in these practices, the better positioned they will be to handle their finances,' he said. More From GOBankingRates These Cars May Seem Expensive, but They Rarely Need Repairs This article originally appeared on 6 Financial Traps Middle Class People Fall Into in Their 20s Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-05-2025
- Business
- Yahoo
6 Financial Traps Middle Class People Fall Into in Their 20s
Your 20s are a wild ride. You're figuring out how to adult, maybe landing your first 'real' job, juggling student loans and trying to fit the occasional impulse Amazon buy into your budget. Learn More: Try This: You might feel like you're making progress, especially if you're not living paycheck to paycheck. But even middle-class folks with steady incomes can fall into some sneaky financial traps when they're young that don't show up on their bank statements until years later. Here's a look at the ones to watch out for — before they quietly drain your future wealth. According to Chris Heerlein, CEO of REAP Financial, one prevalent financial trap for 20-somethings is living beyond their means. It's easy to get caught up in a lifestyle of consumerism, especially with the influence of social media, which often shows a curated version of success. Many individuals in their 20s may even rely on credit cards or loans to fund unnecessary purchases, like expensive dining out, luxury clothing or gadgets. Heerlein noted the immediate gratification of buying what you want can quickly spiral into debt that becomes harder to manage as time goes on. 'My advice here is to live within your means by creating a budget, tracking your spending and prioritizing saving over consumption.' Remember: It's important to build a cushion with an emergency fund and focus on paying down high-interest debts, like credit card balances, before spending on non-essentials. For You: 'Too many young adults neglect to save for a rainy day, thinking they will not have any unexpected expenses,' said Kevin Shahnazari, founder and CEO of FinlyWealth. A January U.S. News survey found that 42% of Americans don't have an emergency fund, with nearly as many (40%), saying they couldn't cover a $1,000 emergency expense with cash or savings. Even modest financial shocks can lead to debt accumulation or delayed payments without a cash cushion. Ideally, a three- to six-month cushion of living costs should be saved before investing or purchasing big-ticket items. Shahnazari said being uninformed about credit, which can lead to maxing out credit cards or paying only minimum payments, can result in negative credit scores and interest payments. To use credit wisely, he said one must keep credit balances low, pay them in full when feasible and check credit reports to catch errors or fraud before they become big problems. You can access your credit report for free weekly at or annually through the major credit bureaus — Experian, Equifax and TransUnion. This is a major misstep. Saving for retirement may feel abstract in your 20s, but compounding growth over the long term is incredibly potent, said Shahnazari. Delaying 401(k) or IRA contributions will cost you thousands in the long term. Saving small, consistent contributions can make you a millionaire in the long term. Student loan debt is a fact of life for many, but Shahnazari said sliding into minimum payments without a payoff strategy can lengthen debt terms unnecessarily. Keep in mind that refinancing, income-driven repayment or accelerated payoff plans can be money- and stress-saving. Many 20-somethings lack the financial literacy they need to make smart choices about loans, investing and taxes. Taking the time to learn about finance — through classes, books or planners — empowers you to make smarter money decisions. The solution to evading these traps, Shahnazari explained, is careful money management, planning and continued money education. 'The earlier adults get established in these practices, the better positioned they will be to handle their finances,' he said. More From GOBankingRates These Cars May Seem Expensive, but They Rarely Need Repairs This article originally appeared on 6 Financial Traps Middle Class People Fall Into in Their 20s
Yahoo
25-05-2025
- Business
- Yahoo
Single and Worried About Retiring? You're Not Alone
If you're single and stressing about retirement, you're definitely not the only one lying awake at night doing mental math. In fact, a new survey from Allianz found that Americans are literally more worried about running out of money than death. That's kind of a big deal to be losing sleep over. Whether you're flying solo by choice, circumstance or somewhere in between, figuring out how to retire comfortably on one income can feel daunting. According to Chris Heerlein, CEO of REAP Financial, saving for retirement is more challenging for single individuals because they lack the dual-income advantage that married couples or partners typically have. Find Out: Read Next: 'Without this financial support, single individuals need to shoulder all saving and investing responsibilities on their own, which can feel overwhelming, especially when faced with higher living costs.' The good news? Plenty of people are in the same boat — and there are smart, doable ways to navigate it. Here's what you need to do to prepare. Contributing to retirement accounts like 401(k)s and IRAs is crucial, said Heerlein, and if an employer offers a match, taking full advantage of it should be a priority. Building an emergency fund of three to six months' worth of living expenses is also essential to avoid dipping into retirement savings during unexpected financial setbacks. Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, agreed that single people should make an effort to maximize their personal savings vehicles, like a 401(k) or an IRA. 'The beauty of compounding means even if the amounts are small and consistent, it can grow big over time,' he said. This is because automating how funds are invested in retirement accounts via payroll deductions can help guarantee a more constant stream of contributions to your future retirement. Be Aware: According to experts, you need to come up with a plan for long-term healthcare costs and consider investing in long-term care insurance. By staying disciplined with savings and working with a financial planner to develop a strategy, it's possible for you to overcome challenges and secure a financially stable retirement. Shirshikov noted that another thing to keep in mind is establishing achievable goals according to your own specific situation. For example, figuring out a reasonable retirement goal should account for your lifestyle aspirations, potential medical expenses and other factors. Financial planners often recommend that singles should be saving a bare minimum of 15% of their pay or more, depending on their income and goals for retirement. As a single person, you will have to come up with a customized plan for saving for retirement that takes into account your current financial situation and long-term plans. As Shirshikov wisely noted: 'Through discipline, consistency and being strategic, any person, whether they are married or not, can lay a solid financial groundwork for the retirement golden years.' More From GOBankingRates 4 Affordable Car Brands You Won't Regret Buying in 2025 These 10 Used Cars Will Last Longer Than an Average New Vehicle This article originally appeared on Single and Worried About Retiring? You're Not Alone Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
8 Money Traps Millennials Fell For That Gen Z Avoids
When it comes to money, every generation learns a few lessons the hard way. Millennials came of age during recessions, a student loan crisis and the peak of avocado toast culture –racking up financial missteps along the way. Learn More: Consider This: According to Chris Heerlein, CEO of REAP Financial, millennials face significant challenges due to student loan debt, rising living costs and stagnant wages. Many entered the workforce during the Great Recession, leading to high debt burdens while trying to save for retirement and major life goals. He explained that these financial pressures are compounded by the increasing cost of healthcare and the difficulty of securing affordable housing, making long-term financial stability harder to achieve. But Gen Z? They're approaching money with a whole different mindset. From credit card chaos to housing headaches, here are the money traps millennials fell into that Gen Z is (so far) smartly sidestepping. According to the Education Data Initiative, millennials have the largest share of total student loan debt despite a declining average balance. Andrew Lokenauth, money expert and owner of BeFluentInFinance, has watched countless millennial clients struggle under crushing student loans — we're talking over $50,000 for degrees that didn't deliver the promised returns. He said his millennial clients often tell him they felt pressured to attend expensive schools because 'that's just what you did. 'But Gen Z. Man, they're different. I'm seeing them choose community college first, then transfer to state schools.' Or they're pursuing trade schools and certifications — smart moves that'll save them thousands. Read Next: According to Lokenauth, back in the day, millennials bought into this toxic 'hustle culture' mindset –burning themselves out working three to four gigs just to stay afloat. 'I still remember one client who was juggling a full-time marketing job, driving Uber at night and selling stuff on eBay,' he recounted. 'She was exhausted.' Gen Z, on the other hand, seems more focused on building actual sustainable businesses or investing in skills that'll boost their main career trajectory. They're playing the long game. 'Here's something that makes me angry: Millennials got absolutely destroyed by housing market timing,' said Lokenauth. Many graduated into the 2008 recession, couldn't buy when prices were low, then got priced out when the market recovered. Meanwhile, Gen Z is exploring creative housing solutions like house hacking and co-living arrangements. Plus, he said they're way more comfortable staying at home longer to build savings. Less stigma about it. After watching their parents lose retirement savings in 2008, many millennials developed this intense fear of the market. 'I can't tell you how many kept their money in savings accounts earning 0.01%,' Lokenauth noted. Gen Z, however, started investing through apps like Robinhood super early. Sure, some made rookie mistakes with meme stocks, but they're not afraid to put money to work in the market. Lokenauth said this one hits close to home as he's had many millennial clients with more than $20,000 in credit card debt from trying to maintain lifestyles they couldn't afford. 'Social media pressure was real,' the expert said. Gen Z seems more minimalist and intentional about spending. They're using buy-now-pay-later services more strategically and generally seem less interested in flexing material goods. Millennials often got stuck in dead-end jobs thinking they had to 'pay their dues.' Lokenauth said he spent five years doing this himself early in his career. 'What a waste,' he remarked. Gen Z understands job-hopping isn't bad and they're way better at leveraging their skills for higher pay. They're also more likely to start online businesses or monetize their talents directly. Through his practice, Lokenauth has noticed millennials often prioritized retirement savings over emergency funds — then got crushed when emergencies hit. Whereas, Gen Z watched this play out and tends to build cash reserves first. They've seen how quickly things can go sideways and want that safety net. Many millennials fell into the trap of increasing spending whenever their income went up. Lokenauth recalls one client who upgraded his apartment, car and wardrobe right after a promotion –then lost his job six months later. Gen Z tends to be more conscious about lifestyle creep and often maintains their basic living standards even as income grows. 'The thing is, millennials weren't dumb — they just faced some truly awful timing and received guidance that didn't match economic realities,' Lokenauth emphasized. Meanwhile, Gen Z had the advantage of watching and learning from these struggles. And from what Lokenauth has seen working with both generations, they're putting those lessons to good use. More From GOBankingRates 10 Cars That Outlast the Average Vehicle Sources REAP Financial, 'Who We Are: Our Financial Planning Team.' Education Data Initiative, 'Student Loan Debt by Generation.' BeFluentInFinance, 'About Us.' This article originally appeared on 8 Money Traps Millennials Fell For That Gen Z Avoids Sign in to access your portfolio
Yahoo
21-05-2025
- Business
- Yahoo
8 Money Traps Millennials Fell For That Gen Z Avoids
When it comes to money, every generation learns a few lessons the hard way. Millennials came of age during recessions, a student loan crisis and the peak of avocado toast culture –racking up financial missteps along the way. Learn More: Consider This: According to Chris Heerlein, CEO of REAP Financial, millennials face significant challenges due to student loan debt, rising living costs and stagnant wages. Many entered the workforce during the Great Recession, leading to high debt burdens while trying to save for retirement and major life goals. He explained that these financial pressures are compounded by the increasing cost of healthcare and the difficulty of securing affordable housing, making long-term financial stability harder to achieve. But Gen Z? They're approaching money with a whole different mindset. From credit card chaos to housing headaches, here are the money traps millennials fell into that Gen Z is (so far) smartly sidestepping. According to the Education Data Initiative, millennials have the largest share of total student loan debt despite a declining average balance. Andrew Lokenauth, money expert and owner of BeFluentInFinance, has watched countless millennial clients struggle under crushing student loans — we're talking over $50,000 for degrees that didn't deliver the promised returns. He said his millennial clients often tell him they felt pressured to attend expensive schools because 'that's just what you did. 'But Gen Z. Man, they're different. I'm seeing them choose community college first, then transfer to state schools.' Or they're pursuing trade schools and certifications — smart moves that'll save them thousands. Read Next: According to Lokenauth, back in the day, millennials bought into this toxic 'hustle culture' mindset –burning themselves out working three to four gigs just to stay afloat. 'I still remember one client who was juggling a full-time marketing job, driving Uber at night and selling stuff on eBay,' he recounted. 'She was exhausted.' Gen Z, on the other hand, seems more focused on building actual sustainable businesses or investing in skills that'll boost their main career trajectory. They're playing the long game. 'Here's something that makes me angry: Millennials got absolutely destroyed by housing market timing,' said Lokenauth. Many graduated into the 2008 recession, couldn't buy when prices were low, then got priced out when the market recovered. Meanwhile, Gen Z is exploring creative housing solutions like house hacking and co-living arrangements. Plus, he said they're way more comfortable staying at home longer to build savings. Less stigma about it. After watching their parents lose retirement savings in 2008, many millennials developed this intense fear of the market. 'I can't tell you how many kept their money in savings accounts earning 0.01%,' Lokenauth noted. Gen Z, however, started investing through apps like Robinhood super early. Sure, some made rookie mistakes with meme stocks, but they're not afraid to put money to work in the market. Lokenauth said this one hits close to home as he's had many millennial clients with more than $20,000 in credit card debt from trying to maintain lifestyles they couldn't afford. 'Social media pressure was real,' the expert said. Gen Z seems more minimalist and intentional about spending. They're using buy-now-pay-later services more strategically and generally seem less interested in flexing material goods. Millennials often got stuck in dead-end jobs thinking they had to 'pay their dues.' Lokenauth said he spent five years doing this himself early in his career. 'What a waste,' he remarked. Gen Z understands job-hopping isn't bad and they're way better at leveraging their skills for higher pay. They're also more likely to start online businesses or monetize their talents directly. Through his practice, Lokenauth has noticed millennials often prioritized retirement savings over emergency funds — then got crushed when emergencies hit. Whereas, Gen Z watched this play out and tends to build cash reserves first. They've seen how quickly things can go sideways and want that safety net. Many millennials fell into the trap of increasing spending whenever their income went up. Lokenauth recalls one client who upgraded his apartment, car and wardrobe right after a promotion –then lost his job six months later. Gen Z tends to be more conscious about lifestyle creep and often maintains their basic living standards even as income grows. 'The thing is, millennials weren't dumb — they just faced some truly awful timing and received guidance that didn't match economic realities,' Lokenauth emphasized. Meanwhile, Gen Z had the advantage of watching and learning from these struggles. And from what Lokenauth has seen working with both generations, they're putting those lessons to good use. More From GOBankingRates 10 Cars That Outlast the Average Vehicle Sources REAP Financial, 'Who We Are: Our Financial Planning Team.' Education Data Initiative, 'Student Loan Debt by Generation.' BeFluentInFinance, 'About Us.' This article originally appeared on 8 Money Traps Millennials Fell For That Gen Z Avoids Sign in to access your portfolio
