Unfortunately, money management is not a part of many school curriculums. This is something that is imperative to be successful, and without the right knowledge, the young adult in your life may find themselves looking for guidance. These tips are here to help young adults to take advantage of their youth and live their best financial lives.
Learn Self Control
These days, we are so used to instant gratification. Learning to delay that gratification is one of the most important life lessons you can learn- and it will help you with your finances. The most important thing to remember is to not rely on your credit card for purchases unless you plan to pay it off in full each month to avoid interest charges. This will help you in the long run to manage your money more responsibly and continue on a path to great financial success.
It is important to be well-versed in finances yourself before relying on someone’s advice blindly. Have confidence in your ability to dictate your own finances. The best advice we can give is to read as many books as you can on the path to financial success. Once you are armed with your own knowledge, you will be able to make decisions for yourself and your finances. It is important to remember that you are ultimately control, and you make or break your own wealth.
Start an Emergency Fund
Ever heard the saying “pay yourself first”? This is one of the most important things to remember as the years go on and you start to build your bank account- no matter what amount of money you start with. All that matters is that you are adding to this emergency fund monthly. Having this money can help when/if you find yourself in situation that you were not prepared for, and you will thank yourself for it. Soon enough, the habit of adding to a fund monthly will spill over into other savings accounts that are there to benefit you. For example, a down payment on a home or vacation money. The sooner you make this a habit, the better.
Start a Retirement Fund
As you have probably heard before, start a retirement fund as soon as possible. It is important to create this habit very early on. You can never plan for retirement too far in advance. Because of the way compound interest works, the sooner you start saving, the less principle you’ll have to invest to end up with a comfortable amount of money to retire. If your employer has a retirement plan and offers a match, you should look to contribute at least the minimum to get the full match, as that is free money that will help you obtain your goals. Our advice is: start now so you can relax later!
Learn about Taxes
Before you get your first real paycheck, it is important to be well-versed in income tax and how it works. When a company offers you a starting salary, the first calculation you should do is how much of that you will be able to take home with you. Then, calculate if that number will cover your monthly expenses with some left over to save.
Your Wealth is in Your Hands
To make sure that you stay on top of your savings, you need to take the right steps to protect it. A financial advisor is a great way to ensure that you are headed in the right direction. Investing is an important step to make sure your money does not become a victim of inflation, which is inevitable as the years go on. There are a variety of types of investment portfolios you can choose from to make sure your money is working for you, getting you closer to your goals.
If you or someone you know starts their financial journey, it is important to remember that starting off on the right foot now may dictate how comfortable life is later on. Making the correct financial choices will help you meet your goals- whether that be laying by a beach in 30 years or being able to pass on financial security to generations to come. Whatever your hopes and dreams are, these small tips can help get you there!