Financial Literacy Archives - DIYmoneytrack.com

The hidden cost of living: A young adult’s guide to inflation

If your streaming service raised its price by 3% every year, you’d probably notice. If your rent rose 3%, you’d definitely notice. But when almost everything gets a little more expensive each year, many people don’t notice until they wonder:

“Why does my paycheck feel bigger, but my money feels smaller?”

That’s inflation—and understanding it is one of the most important financial skills young adults can develop.

Most young adults spend time tracking their bank account balances, investment returns, and credit scores. Yet many overlook inflation – one of the most important financial metrics affecting every dollar they earn, save, and invest.

Ignoring inflation is like driving a car while covering up the speedometer. You might still get where you’re going, but you’re missing information that could prevent expensive mistakes.

If you’re interested in better understanding inflation, including why and how to track it for planning purposes, keep reading.

Why more young professionals are choosing HSAs

After my post on the rising cost of healthcare, a few readers reached out asking for additional guidance on how to choose the right health insurance plan.

Choosing a health insurance plan can feel overwhelming—especially when you’re staring at unfamiliar terms like deductibles, copays, premiums, PPOs, and Health Savings Accounts (HSAs). Many young adults simply pick the plan with the lowest deductible or the lowest monthly premium without fully understanding how that decision could impact their finances for years to come.

The reality is that your health insurance choice is more than a healthcare decision—it’s also one of the first major financial decisions you’ll make as an adult. Selecting the right plan could save you hundreds or even thousands of dollars each year while helping you build long-term financial security.

In particular, Health Savings Accounts (HSAs) have become one of the most powerful—and often misunderstood—tools available to young professionals. When paired with the right health plan, an HSA can help you reduce taxes, save for future medical expenses, and even build wealth over time.

In this post, you’ll learn what an HSA is, who qualifies for one, how it compares to traditional health insurance plans, and how to determine whether an HSA could save you money while helping you build long-term financial security.

Gen Z, financial nihilism, and why financial education matters more than ever

A recent article from the World Economic Forum highlights a growing trend among Gen Z adults (aged 18 to 27 years old) often described as “financial nihilism” — the belief that traditional paths to financial success no longer work.

Faced with stagnant wages, rising housing costs, student debt, and economic uncertainty, many young adults are turning to riskier financial behaviors such as cryptocurrency speculation, prediction markets, and high-risk investing.

The article argues that these behaviors are not simply reckless decisions, but often rational responses to a system that feels increasingly out of reach. Homeownership is harder to achieve, retirement feels distant, and many young people believe slow-and-steady saving may never be enough.

Why longevity risk matters more than you think

When you’re in your 20’s or 30’s, thinking about how long you’ll live—and whether your money will last that long—feels abstract at best. Retirement is decades away. There are more immediate priorities: paying off debt, building a career, maybe buying a home.

But here’s the reality: one of the biggest financial risks you face isn’t market crashes or inflation—it’s living longer than your money.

That’s called longevity risk, and ignoring it early can quietly cost you decades of financial freedom later.

To learn why longevity risk matters for planning purposes at any age, please read on.

How to stay ahead of your debt

For most young adults, personal debt doesn’t pile up all at once—it quietly grows when small monthly payments feel manageable but add up over time.

The easiest way to make sure you don’t accumulate too much debt isn’t about cutting out every fun expense. It’s about tracking a few simple numbers that tell you, early on, when debt is becoming a problem.

Read on to learn more about these numbers and tips for the easiest ways to stay debt-free.

How to manage escalating HOA fees

The cost of living crisis in the U.S. isn’t just about increasing utilities and grocery bills — it’s also about growing “mandatory” expenses that Americans can’t directly control. Rising Homeowner Association (HOA) fees are a prime example.

With average condo and HOA fees increasing 14% last year, what was once a predictable, modest expense has become another pressure point in the modern cost of living crisis.

For many homeowners across the U.S., those fees are rising faster than expected—sometimes by hundreds or even thousands of dollars per year.

As housing affordability continues to tighten, escalating HOA fees are becoming a hidden expense that can quietly erode household budgets and long-term financial plans. If you pay these fees and want to understand why these costs are rising and how to hold your HOA accountable, please read on.

Why so many Americans live paycheck-to-paycheck and how to break the cycle

More Americans than you might expect are living from one payday to the next. Some are struggling on low wages, others earn six figures and still feel fragile.

The good news: while the problem is widespread and driven by real economic forces, there are clear, practical steps people can take to build stability. Below I share recent statistics that reveal the scale of the problem, explain the main causes, and offer access to a plan you can start using today if you need help breaking this cycle.

Lump-sum vs. Cost-averaging: Which investment strategy is right for you?

So, you’ve got a tidy sum of money – maybe an inheritance, a generous bonus, or years of careful saving – and now you’re faced with a classic investment dilemma: Do you invest it all at once (lump-sum) or spread your investments out over time (cost- averaging*)?

Both strategies have pros and cons, and understanding them can help you make an informed decision for your financial future. If you are interested in learning more about these investment methods, please read on.

How to maximize your return on savings to reach financial goals faster

Are you maximizing your short-term savings return?

If your answer is “I don’t know” or “probably not,” then read this post to find out how to make ‘easy’ money simply by moving shorter-term savings to higher yielding accounts.

Whether you’re saving for an emergency fund or a vacation, improving the return on your savings accounts will help you reach your goals faster.

The difference between leaving cash in a traditional bank or brokerage savings account and investing it in a high-yield savings account can be worth thousands of dollars. Opening and moving money between savings accounts has never been easier, so chasing short-term yields online can be done with a few ‘clicks’.

And with annual inflation currently around 2.4% in the U.S., a short-term savings account yielding over 3% (assuming 20% tax rate) may even increase your purchasing power.

Read on to learn more about maximizing your short-term savings rate and where to find the best accounts.

Am I on track? Use these 5 personal finance ratios to find out

As a young adult, you’re at the early stages of your financial journey through life. You may be thinking about saving for a down payment, paying off student loans, or maybe even planning that dream vacation.

But how do you know if you’re truly on track? This is where personal finance ratios come in – they’re like your financial GPS, giving you a quick snapshot of your financial health and helping you make informed decisions.

There are 5 essential ratios that you should know, and track regularly over time. These ratios give you a well-rounded view of your financial stability and highlight areas for improvement, such as reducing debt, increasing savings, or building investments. If you are already following your money, then calculating these ratios on a regular bases will be straightforward.

To learn more about the 5 personal finance ratios and how to calculate, please read on.