You might think that a midlife crisis is the only one you have to watch out for (and much later in your life), but the quarter-life crisis might be sneaking up on you and denting your financial well being. Here’s how to spot it and send it packing.
What Does a Quarter-life Crisis Look Like?
A quarter-life crisis strikes in your 20s and 30s when you’re out in the world and trying to forge your identity and career, while dealing with relationships and debt. You’re in the real world now and don’t know how to manage all the stress that’s striking you from different directions. Sound familiar? Interestingly, it displays similar characteristics to the midlife crisis, such as feelings of depression and insecurity.
One of the things that might happen during this time is that you spend money to feel better.
What a Quarter-life Crisis Means For Your Pocket
Of course, there are different degrees of the quarter-life crisis but if you’re feeling depressed or insecure, you might try to change your appearance in order to boost your confidence. That could mean a new hairstyle, manicure, or a complete wardrobe change, for example. It can all be quite expensive by the end of it, especially if you’re becoming an impulse buyer. Just because you’re not doing something splashy like your father or grandfather did during their midlife crisis, like buying a sports car, your life choices can be lumping up quite a bit of debt over time.
Here are some other things you might be doing during a quarter-life crisis.
Leaving Your Job
If you feel trapped and unfulfilled in your job and you decide to leave it on a whim, this could severely impact your financial well being. In a recent survey, 75 percent of employees in their 20s were said to earn less than $50,000. That might not sound like a lot, but if you’re throwing it away it can be negative for your financial well being and possible rainy days, especially when you consider that there are debts to pay, such as student loans, which are the main source of debt for 47 percent of this age group! Falling behind in payments can also lead to a negative credit which won’t serve you down the line.
Risky Behaviour
One of the things you might do if you’re having a quarter-life crisis is stop playing it so safe. This could mean taking up adventure-filled holidays or doing possibly dangerous and expensive hobbies. While these can be fun, if they are done often or consist of a variety of risk-taking behaviour, then they could possibly lead to medical bills, which would incur more costs.
Medical bills are no fun but it’s even worse if you don’t have any kind of health insurance. A study found that the age group of 18 to 29 year olds were least likely to have insurance, and this included car insurance (that you can find via this chip insurance car brokerage), disability insurance and life insurance. You might feel invincible now when you’re young and healthy, but insurance is important and the earlier you start, the better it will be for your pocket (and you can click to find out more about disability insurance). Up until the age of 40, life insurance only increases by a little every year but this amount increases later on, so it’s better to play it safe. Should you ever fear you’re going to lose your job and income stream, it might be wise to look into how to select physician disability insurance? Or other insurance options for other common career paths.
Splurging on Clothing
Fashion will probably be a huge part of your quarter-life crisis. It’s easy to fall into the consumerism trap of buying new clothing and accessories at regular intervals in order to feel good and make a good impression, while also flaunting your individual style to the world. Added to this, clothing is also a common expenditure because you need a formal wardrobe when you’re on the market for a job. The good news is that you don’t have to buy brand new items and can actually save a lot while still looking trendy with vintage finds.
Here’s another good reason to get creative with your wardrobe: stats show that women in their 20s and 30s generally tend to start spending more on clothing until they reach the peak of 45 – this is when spending goes up to a whopping $750 billion every year in this age group! Now, imagine the extra pressure you place on yourself with a quarter-life crisis and you’ll see how you can easily create lots of debt for yourself.
Get out of the Crisis Zone
Instead of trying to self-medicate your quarter-life crisis by spending lots of money and landing up in lots of debt which is even more depressing, try to see it as a chance to focus on achieving the life you want. What are your dreams, goals, aspirations and where do you want to be in your life? By focusing on your passionate goals, you can pave a much healthier road to your future and gain a sense of purpose, without bringing financial baggage along for the journey.
If you’re feeling like you’re in the throes of a quarter-life crisis, you don’t have to let it destroy your financial well being or pull you off course from your bright future. Follow the above steps to have a wakeup call to your finances and get back on track.
Study sources and statistics:
http://www.businessinsider.com/how-much-women-spend-on-clothes-2013-11
http://www.bankrate.com/finance/insurance/reasons-to-buy-life-insurance-now-5.aspx
https://www.termlifeinsurance.com/the-high-and-low-costs-of-a-mans-midlife-crisis
http://www.moneyunder30.com/20-somethings-money-survey
