Twenty-something and broke!

Getting sucked in by the glitz and the glamour of an alluring glam life is not a black-hole that forms overnight. Footing a small charge here and springing for another bill there, the rush you feel every time you can afford something is truly tempting. What is trying out yet another artisan coffee shop that just opened up around the corner anyway? And for that matter, the fact that the latest makeup palette is more pigmented than any, you already own is reason enough to add it to the cart.

News flash: it really is not!

Just because you can, does not mean you should. And before you know it, it is these small expenses in the form of 'must-have purses' or adrenaline-inducing video games that will recur again and again until you finally discover you are all out of cash to spend. And that is when you will find yourself staring down the deep, dark abyss of being broke.

It is funny that your 20s should be for you to enjoy yourself. A dose of reality will tell you that about 20 percent of Bangladeshi households belong to the middle-income group. With the national household earning of a regular Bangladeshi family at Tk 15,945 as of December 2016, and expenditures amounting to Tk 15,715 per month, making room for frivolous spending is quite impossible.

This is exactly why young adults in their early 20s depending on family support find themselves in a financial fix. Tabling impulsive expenses by somehow getting a handle on them for now, a 20-year old might have more pressing matters at hand.

A fund manager by trade employed at Impress Capital Ltd., Muqit-Al-Rahman clarifies on the financial gap weighing down on the urban families of the country, “Families of urban Bangladesh have a certain level of income, but financial priorities such as education and marriage ask a greater contribution than the humble income allows. And this is what creates a financial gap.” 

With university tuitions going through the roof, the ifs and buts of obtaining a higher education might have you losing sleep. Even if you are one to bask in parental support, there is only so much you can ask of them due to their often conservative or even variable incomes. Instead of blindly depending on them, try taking matters into your own hands.

And the first step?

“To find opportunities where they are available,” advises Muqit-Al-Rahman.

Working as a freelancer in a given field, defining your own work hours and having pay slips issued accordingly can be one way of making some quick cash. Saving up for a few semesters and footing your own expenses will, at the very least, have you walking tall and proud, and give you a taste of the working world. This has been the case for Mahtab Ahmed, a 22-year-old international student pursuing a degree in engineering at Simon Fraser University in Vancouver, Canada.

Splitting his time between Dhaka during the holidays and Vancouver, he offers his take on working multiple jobs to make ends meet, “You might not like everything about it but it is an experience which will only help you.” And the idea is becoming more and more common in Dhaka city too, with multiple university students now beginning to embrace independence and opt for some part-time work.

Moreover, taking up part-time jobs or even providing private tuitions are the usual safe options to choose from.

However, if you are one to try going all the way and completely forego financial support from the family, your best approach might be to apply for a scholarship, which is exactly what Nahid Tabassum did.

The now-27-year-old hopeful graduate of North South University still remembers being in a fix with tuitions.

“My father was ill and with hospital bills piling up, my family was already in deep waters. How could I ask them for a private education then?” she resorts to a rhetorical question.

But, eventually, she found a way around it. “I finally applied for a scholarship and got my tuitions fully waived. I even took up private tuitions to stay solvent. And after a while, I did not have to ask my parents for money anymore,” she proudly shares.

Things will eventually change, and you will find yourself a promising graduate with many opportunities ahead of you. Every dreamy pursuit to the stars might seem attainable with nothing standing in your way anymore. 

Well. That may not be entirely true.

Graduation does not always ensure a job right away. And the 'waiting out before the callback period' might be the worst time of all, especially if you finished school under the looming cloud of bursaries and student debt. This is precisely why Muqit-Al-Rahman advises the savvy move of accumulating at least three months' worth of expenses, let them be for commutations or simply to look good at office!

Letting nerves get the better of you before your big debut as a working individual right out of college is all too familiar. Planning out the day ahead to a T, forming your own expectations of what might be is rather spontaneous with you not even fully realising it. That is, until your wild expectations meet a plummeting fall.

 “I expected a lot out of life after graduation.  Studying economics, I had hoped to work at World Bank, earning a very lucrative salary,” reflects Rezwana 

Rahman, a 25-year-old graduate of North South University.

In an excitement to start working full-time, the often-overlooked fact is probably that employers offer a very standard paycheck which is not all that lucrative to start off with. What's just as important as the monetary sums, however, if not more, is perhaps the work environment of the place you are signing up to work at.

Aspiring to work at an engineering consultancy firm, Mahtab Ahmed believes in progressive work environments, prioritising them over monthly salaries. “A better boss is better than better pay,” he concludes.

In the midst of everything with money and work that may go wrong in your mid-20s, you also begin rediscovering yourself in a whole new light. This is when you learn that not everything goes according to plan. But maybe, that's okay.

Nahid Tabassum's initial flair for the creative arts soon evolved into a passion for imparting knowledge. Finally, taking to teaching as a profession, she shares, “I love what I do now and getting to know people and children is why I wake up in the morning. I plan ahead, but in the end, I improvise and make the best of the situation.”

For Rezwana Rahman, though her plan to work at World Bank burned out, her perseverance did not. While the corporate life was not her cup of tea, she opted for 'Plan B.' What started out as a means to keep up with financial costs soon blossomed into something she loved doing. Realising her true calling, Rezwana Rahman, too, now prospers as a mathematics teacher.

In a nutshell, accepting and adapting to changes will get you through the shroud of confusion and struggle to truly discover the flickering, silver lining in your 20-something years in the end.

Even with a more positive outlook now in tow, your spending habits may still remain rather questionable. Whether it is an old habit you just cannot shake or chasing the thrill of a splurge, try putting a halt to impulsive purchases like 'Ubering' to the nearest destinations or pampering yourself at the salon.

What might help you in mastering the art of frugal spending could be to set a monthly budget in contrast to your income, while analytically tracking down expenditures.

Swearing by his own responsible tracking habits, Muqit-Al-Rahman strongly advises, “Every individual should make budgets that'll allow for one-third of the monthly income to be saved. If that proves to be too much, at least 10 percent must be put away every month.”

But a tempting question is what do you save up for now?

The big stops here are the glorified Master's degree and the major milestone, marriage. And rescuing you in this equation? A little pre-planning.

Having an open discussion with parents and evaluating viable options when it comes to pursuing a master's programme or being wedded off will go a long way, but what will go an even longer way are the calculative risks with investments.

Instead of the usual savings accounts, opt for a moderate yielding option like fixed deposit schemes, or a high-yield option like mutual funds. To clarify, a fixed deposit scheme is a kind of savings account where interest is paid on the money deposited in the account for a stated period of time. And, while we are already on the subject, a mutual fund is operated by asset management firms, pooling money from many investors to invest mainly in capital market securities.

The amount of interest debited in a fixed deposit account and returns in the forms of dividends and capital gains from an investment in mutual funds are what champions them against humbler savings accounts.

Investments entail risks. And while it is possible for the bank you chose for a fixed deposit account to go bankrupt, it's still low-risk considering the latter choice. Warning to proceed with caution, Muqit-Al-Rahman goes on, “Since mutual funds invest mainly in capital markets, the risks can be much higher, so choosing the most appropriate mutual fund, managed by the right asset manager having the necessary skills and track record, is very important.”

And after considerations have been made, savings have to be pre-planned and mature in time to reap the benefits for the expenditure you were awaiting. This is where a more mindful approach to future endeavors can prove rather helpful. If not, taking out loans is always an option, but debts can get tricky with repayments and interests.

Even with all that out of the way, life may still not run as smoothly. You may now juggle the dilemma: should you live with in-laws or move out?

A sweet perk for people living in extended families is the omission of rent. Moreover, utility bills and groceries will always be taken care of. However, for these sigh-inducing

reliefs, prices in the form of curfews and other restrictions also have to be paid.

And if you decide to move out? The good news: you can set your own rules; it is your own house after all! The bad news? The combined financial accumulation of rent, food, commutes, medical bills, utilities and more. However, if you have the basic costs of rent, groceries and utility bills covered, you should not be too far away from managing the rest.

And if you are one of two working spouses, things might present themselves to be simpler. Or maybe not.

Married and living independently for about a year now, Nahid Tabassum clues us in, “With both my husband and I working, we like to think we earn enough. But we don't. Miscellaneous costs and unexpected expenses like surprise visits to the dentist will always find you.”

Moreover, it can take a toll on the relationship as now you're both too tired to compromise or be patient and you just want to get ready for the next day.

And with the mistakes and the dilemmas, you will now have taken in great lessons from your 20s, setting your eyes on the next decade to follow. However, persisting financial fixes can still be resolved by simply beginning to save. With no right time or amount when it comes to savings, the hidden message here is to acknowledge that every purchase follows an opportunity cost. You cannot always have what you want. And responsibilities cannot be evaded.

Plans may fail, savings drain and your lives may make a complete revolution at 29, in comparison to when you were 20. “The trick is to accept changes and still pursue your passions to see how far you can go. I still haven't given up on all my dreams yet,” encourages Nahid Tabassum.

“It's important to learn from your shortcomings and be wiser from here on in. That's what I want to be,” optimistically shares Rezwana Rahman.

After all, your 30s are for new milestones to be achieved and for new ground to break. Solvency is a temporary situation and being broke is not so scary an abyss at the end of the day. And the great, big world is still your oyster, waiting to be unraveled every time you turn a brand new corner.

Photo: LS Archive