How a Quarter Life Crisis Can Kill Your Finances

Not every twenty-something suffers from a quarter-life crisis, but those who do know that it can make you act out in strange and unpredictable ways. While the famed “mid-life crisis” has long been characterized by the desire to act and appear younger, the quarter-life crisis usually manifests itself in the opposite fashion: Millennials who’ve spent two or three years in the workforce realize that they can no longer classify themselves as “post-grad,” and begin to have qualms about whether the choices they’ve made are the right ones. Will the paths they’ve taken lead them towards a better future, or are they merely just marking time?

While these doubts are normal and healthy, it’s important not to let the quarter-life crisis destroy everything that you’ve worked hard to build so far. Here’s how to keep a handle on your finances when these blues come to call.

Stick with your day job

There’s nothing wrong with working hard to achieve your true passion, but do it on your own time. Quitting your job to chase rainbows might look pretty in the movies, but the real world charges rent. Consider volunteering on the weekends, or starting a blog about something that interests you.

Don’t splurge on getaways you can’t afford

Everyone has at least one friend who’s always taking exotic vacations and splashing the photogenic results all over social media. Of course it looks tempting, but don’t take the bait by blowing all your savings on a trip that will only last a week or two. If you need a change of scenery, that’s fine, but keep it reasonable—say, a long ski weekend or a concert in a nearby city.

Keep saving

If you truly find yourself unfulfilled in your work or social life, there’s nothing wrong with seeking change. Before taking the leap, however, you should make sure you have plenty of the other kind of change—and a good supply of folding money, as well. Often the worst mistake a budding entrepreneur can make is inadequate preparation for the next step.

Maintain a positive attitude
Remember, you’re still young. That’s why it’s called a quarter-life crisis—there’s still plenty of time ahead to make choices, to start new chapters, and of course, to fail. Look at each bump in the road as a learning opportunity, and go on from there.

Biggest Excuses for Not Starting a Personal Budget

The power and effectiveness of creating a household budget and sticking to it have been proven over and over, yet so many people still find a myriad of excuses as to why they cannot start a budget. Here are few of the most common excuses, and why it is time to push past the wall and take control of your financial health:

TIME CONSTRAINTS: Although taking the time to create an initial budget can be a time-consuming endeavor, once the framework is established, it takes less and less time to maintain and implement moving forward. Time is money, so it is absolutely worth your time to invest a little effort now in order to save more money in the long run.


PROCRASTINATION HABITS: It is easy to delay saving and budgeting, but sooner or later this will catch up with you. Don’t let life get in the way of doing the most important thing that you can do today to guarantee future financial health. NOW is the time to sit down and create this invaluable framework of guidance.


INCONSISTENT INCOME: Yes, making and sticking to a budget becomes more difficult when the income level varies from month to month. However, the fixed expenses are consistent regardless of inconsistencies in income levels, thus the budgeting is still a necessity. Using an average income in your calculations and building a buffer for the lean months are two common tools.


DENYING THE TRUTH: Sitting down to work out a budget can be a scary proposition because it forces you to examine where every penny is going. Yet, that is the point. You will never create a healthy financial life without knowing where all of your money is going each month, so now is the time to take control, regardless of what information you learn. Remember, knowledge is power.


BUDGETING IS HARD: Even the most math-deficient individuals can create a basic budget. Don’t be scared off by the fancy spreadsheets and electronic apps that some people use to manage their household finances. There are a number of simple and intuitive programs to assist you in budgeting. For those looking to keep things extra simple, a piece of paper and pen and calculator will suffice.

Too Much Savings?

Is there such as thing as having too much money in savings? The answer is yes! A savings account does not make your money work for you like it can elsewhere. Sure, you’ll receive interest, but it’s nothing compared to what you could be doing with your money. Below you’ll find a guide to savings – how much to have on hand and what to do with all the rest.

How much is too much?

This answer varies from person to person. A good rule of thumb is to have at least 6 months worth of necessary expenses on hand. Having this emergency fund in savings provides you with quick access to money should you need it for anything or in the event of losing your job. Other than this savings account, all extra income should be put to work and earning you more.

Certificate of Deposit

For short term savings goals, you should talk to your bank about a CD. These insured deposits are held for a predetermined amount of time and mature at varying rates. No matter what, they have more of a return than the interest on a normal savings account. If you’re planning to save for up for a larger purchase in the next few years, a CD is your best bet.

Invest for the Future

Once you establish your short term savings, your next priority is to invest for retirement and the future. Investments take much longer to grow, but the returns can be substantial. When investing there are many different options to chose from. The most common are IRAs and 401ks. If your employer has a 401k plan set up, you should be contributing to it and benefiting from whatever match they provide.

Working with a wealth advisor is a great option for all other types of investments. They have experience growing wealth and can help you set out to achieve your financial goals. The biggest thing to take into consideration about investments is your risk tolerance. Riskier investments provide much larger returns, but you may very well loose that extra money if the investment does not pan out. There are plenty of moderate to low-risk investments that can still put your money to work for you.

Young Adults Need Financial Role Models

Navigating finances on your own for the first time can be a difficult pill to swallow. Many young adults feel unprepared for handling their own finances in a productive way. In order to make for a smoother transition into full-fledged adulthood, Millennials need to call on a financial role model to help them. This can be a family member or anyone you feel comfortable talking finances with. Either way, seek out help to get you on your own two feet. Below are some areas that cause young adults the most stress.

Student Loans

Coming to grips with taking on all that debt was hard enough, but now it’s time to face the reality of paying them back. A financial role model can assist you in coming up with a plan of attack. Tackling students loans is a huge undertaking and shouldn’t be left for you alone to make decisions on. Someone more financially savvy than you may be able to help you formulate a plan for both the short term and long term.


You barely just got your first full-time job and you’re already given options for retirement. Discussing an IRA and 401(k) may make your head spin, but once you understand it, you’ll be thankful you’re making contributions. A financial mentor can help you come up with the best retirement plan to set you up later on down the road.

Gaining Control

Getting a grip on your overall finances is another area where a financial mentor can help you out. This can be anything from budgeting to buying investments. Whatever the case may be, taking charge of your finances is the first step to success. The more financially stable you become, the better equipped you’ll be for all life has to throw at you.

Ask for Help

Finally, do not be afraid to ask for help in the first place. Becoming financially aware takes time and energy, but you shouldn’t have to deal with it alone. If things get tough and you feel overwhelmed, be sure to reach back out to your financial role model. They are there to help you, so use them as a resource.
Too many young adults are unprepared for taking care of their finances after college. This is why it is important to seek out a financial role model. They can show you right from wrong, how to turn your finances around, and begin planning for retirement. Take the time to gain a better understanding of your finances before you make disastrous decisions. You’ll be thankful you did.