Some people take their financial knowledge for granted. For some young adults, their knowledge of real finance tips might be fleeting at best. The worst part is, these younger adults often don’t even know that they have huge gaps in their knowledge. To help such people along, today we’re going over some financial tips we think every young adult needs to hear.
This might sound crazy, but, even if you’re in your early twenties, you should already be saving for retirement. The sooner you get money in a retirement fund, the sooner you’ll be reaping the benefits of interest rates moving in your favor. If you haven’t started saving for your retirement yet, it’s time to start.
If your company sponsors a retirement plan, get on that. Maybe they offer a match up to a certain percent of your pay. Max that out, and do it as soon as possible. That is literally free money that you should not be leaving on the table. With the right saving strategy, you’ll soon be able to call your job something you want to do, not have to.
Break open that expense ledger (you don’t have one of those? Make one!) and craft a budget. What is each dollar of your paycheck doing? That money should all have a job before it even hits your bank account. How much of it are you saving? How much is going to bills? Have you thought about how much spending money you need to set aside?
When you have a budget that’s airtight and accounts for every one your dollars, you’ll find you’re in better control of your finances. With this budget available, you can manage your money, start saving, and get out ahead of your own finances.
This is a piece of financial advice that often eludes younger adults. Financial advisors are baffled when they find out young people have little or no money saved back. Get a savings account with at least three months of your pay saved back, and do it as soon as you can. It might sound tough, but, trust us, it’s worth it.
Having this money saved back helps you weather a financial emergency. Maybe you get laid off and need to make your bills. Maybe you get in an accident and can’t work. Whatever the case, you’ll be glad you can pay yourself for at least three months when the time comes.