Given the "Great Recession" that the U.S. economy is still working its way out of, it's no surprise that young people are still having a very difficult time finding jobs. Today, the International Labor Organization (ILO) said that 81 million of the 630 million 15-24 year old in the worldwide labor force are unemployed. This staggering number means that the global youth unemployment rate is nearing 13% with 7.8 million more youths unemployed than in 2007.
What does this mean for American Gen Y's? For one, the labor market has not yet turned the corner and if today's weekly jobs report is any indication, we have a long way to go. If you're lucky enough to have a job in this downturn, it would be a great idea to establish an emergency cash fund should a worst-case scenario arise such as the loss of a job or a severe reduction in income.
Sadly, nobody is immune from the effects of this ongoing crisis as all classes of workers have been hit with job cuts and reductions in pay. This makes it all the more important to create an emergency cash fund where you set aside a percentage of your income that you are comfortable with, say, 5% of your net discretionary income into a savings or money market account. Another interesting idea to help build this fund but at a smaller level is by taking out all of your change and $1 bills from your wallet daily and depositing that into your fund. At the end of the month, you will be amazed at how much you accumulated! Better yet, at the end of the year, your emergency cash reserve will be significantly higher and it may even be possible to lower the amount you take out from your income.
With this fund, you will have the liquidity that you need in a cash fund should you find yourself facing a worst-case scenario like millions of other Gen Y's are right now.