When it comes to growing up and maturing, there are a lot of things that will change in your life. One of the biggest things is your finances. You go from getting help from your parents or family to maybe receiving financial aid in school, to then being on your own completely.
Each moment in your financial story can be full of stress-inducing decisions, unless you are as prepared as possible. So, how can you find financial success as a young adult? Well, we have a few ideas to help you get on track and stay there when working toward a prosperous financial future.
Be smart with your credit
Building credit can be a scary thing, but it doesn’t have to be. Though it is necessary for your future purchases and life moments, know that there are ways to build it without getting too overwhelmed. A great place to start building your credit is with a credit card from your bank. They normally have little to no interest to start and they get you set up with a low minimum. Though that might not be ideal, it is a great place to start as a young adult. If you notice you are getting other credit card offers, you want to make sure that they are worth your while and have benefits that will truly work in your favor as the user. Just be sure to use your cards sparingly, and pay it off right away. This will help to save you from financial turmoil and debt later on.
Start saving now
No matter how little you are currently making, we highly advise you to put a specific amount away each month or every time you get paid. Having an emergency fund is crucial, especially in young adulthood, so it is vital to start creating that fund now. That way, you can benefit from it later. Even if you are only able to put away $5 a week, that is more than nothing. You can either put your money away in a piggy bank of sorts, or have it automatically deposited into a savings account at your bank. We suggest choosing the method that you think will make it harder for you to spend impulsively.
Live within a realistic budget
Creating a budget and living within it is something that is a must when it comes to finding financial success. If you live outside of your means and spend money you don’t have, you are setting yourself up for major disasters and financial failures. Using a digital budgeting tool or a good old-fashioned paper budget journal can help you see what you are spending your money on and maybe what you shouldn’t spend your money on.
Think about your future
While you are young and having fun working, you may not be thinking about the financials it is going to take to retire. But, there is no time like the present to start thinking about your financial future and how you can be benefiting yourself now. If your company offers a 401K plan or a Roth IRA investment opportunity, learn what it will take to set yourself up with one. You and your future retired self will be glad you did.
Educate yourself financially
Something that isn’t stressed in school but should be is how to have healthy finances. So, we have to take it upon ourselves to get a financial education. The good news is there are so many books to teach you how to budget and grow your money, and there are plenty of free videos to help you along your money journey. Not sure where to start? Typing “financial success” in your favorite search engine is a great place to start.
I hope that you find financial success in this phase of your life and every phase you will be a part of in the future. Good luck!