The key to your long-term economic success is good planning. Start following these financial basics for young adults and your financial future will be assured.
If you’re young and smart, a consistent financial strategy can lead to a rewarding and comfortable life. Learning about finances can be overwhelming, though, here are a few tips to serve as the basic building blocks of a stable financial future.
Every retirement-aged person will tell you: “I wish I started saving earlier”. Start now, or it may never happen. Many jobs will offer retirement plans as part of a benefit package, which makes saving easy. If you start saving today, your money will have a chance to grow, and the more you put away now, the more you’ll have later!
There are lots of apps that make budgeting easy, but you can also lay out a good, old-fashioned spreadsheet. Keep track of all the money that comes in, and all the money that goes out, and this means everything! You might not realize you’re spending more than $50 on coffee a month until you see it laid out in writing. Find a budget tool that works for you and stick with it. It’ll make it easy to see where you can cut out some frivolous expenses.
Credit cards aren’t free money and aren’t there for you to max out. While it’s true that it’s a good idea to build credit, it’s important to pay it back in full every month, or you’ll find yourself in debt, with interest payments too. Credit cards are great for bigger purchases but should never be relied on if you don’t have the funds to back it up.
Having a lot of debt from different sources can sometimes seem like an endless struggle, but it’s smart to make an actionable plan. Set your goal and focus on the debts that have the highest interest rates, as they will end up costing you more in the long term.
This may seem counterintuitive – how can you plan for something unexpected? What we mean is, have a plan for when life throws you a financial curveball so you don’t get derailed by unexpected expenses. If you are in a temporary cash crisis, make sure you take care of it expeditiously instead if ignoring it and facing the consequences (like bank fees or damaging your credit score).
Sure, saving for retirement is a big deal, but it’s always smart to have a few hundred dollars (or more if possible) set aside for emergencies like medical problems, car trouble, or unexpected house repairs. It’ll be a relief to pull out that $1,000 when the fridge breaks, instead of scrambling to put the money together.
Following these steps can make your transition to living on your own a lot easier and can improve the relationship that you have with money! And if you do find yourself with a temporary financial challenge on your hands, contact us for a quick and manageable solution.