Introduction
Cicero’s wisdom applies to people today as much as ever. Preparation and planning are key elements of financial literacy education. Sometimes, however, circumstances change so rapidly that even the most prepared people experience hardship. In fact, there is plenty of evidence1 showing people aren’t well prepared financially during normal times, and there are some interesting stories about people’s financial matters.2 The present times are anything but normal. In this article, we’ll discuss how the COVID-19 pandemic has affected young people and their families, focusing on the facts that young people have been more likely to lose a job or take a pay cut than have older workers and that 52 percent of young adults 18 to 29 years of age now live at home.3 We’ll discuss some sources of financial stress, costs and benefits of living with family, and ways financial help is available in the economy, and we’ll close with remarks on preparing for the future.
Financial Stress
While the U.S. economy has had two recessions since the year 2000, resulting in increases in the unemployment rate, it’s been over 100 years since the United States experienced a global pandemic comparable to the COVID-19 pandemic.4 In addition to the illness and death associated with COVID-19, there have been significant economic effects, including unemployment. The FRED® graph in the figure shows the increases in unemployment during recessions. (These are indicated by the gray bars; although, because the most recent recession hasn’t officially ended, that area is beige.) As you see in the graph, when the COVID-19 pandemic started in the United States, the unemployment rate spiked quickly as large segments of the economy shut down to slow the virus spread. Read more…..
Chart of the Day
Icarus TV
Two federal unemployment insurance programs end on Saturday. The federal eviction moratorium is set to expire on New Year’s Eve if President Trump does not take action.