7 Financial Tips for Young Adults
oung people are facing a world where uncertainty is the only certainty that they have. Long gone are the days of company loyal and with it the pension plans, benefits and increased upward mobility. Mandatory government instituted health care, contract jobs, and globalism have changed the dynamics for many job seekers, individuals who have recently completed college and launched their careers. With perhaps very little money to spare, saving any of it may seem out of the question. Still, there are seven financial strategies or tips for today’s young adults that can help them succeed.
1. Start saving money. The sooner you save money, the better. Open up a retirement account even if you still have 40 to 50 more years of work ahead of you. The money you save when you are younger will compound and will result in much more money later on. Yes, you may be socked with student loans, but if you can put some money aside now you’ll have more money later on.
2. Be mindful of credit. Credit is a useful tool, but like fire it can burn you. Use credit wisely by using only what you need. Intend to pay off your credit cards every month and if you must take on debt, such as for a house, have an end game in mind. Understand the tax advantages of going into debt, but also realize that staying out of debt can be much more useful to you.
3. Practice thrift. You may have heard “stay within your means” and other thriftful admonitions. Its a thinking that long served Americans well as they headed west, endured crop failures and famines, and learned to live on little and without government help. This tip ties in closely with the previous tip especially if you use credit cards. It can be so very tempting to buy what you want when you want it, but a lack of financial resolve can come back to bite you.
4. Build business relationships. Networking is important and it should be a life long practice. You need people and people need you. There will be times in your life when you hit a dry spell and you’ll need help. You’ll also be able to reciprocate when a person you know experiences a similarly quandary. Apply this thinking in your business too and you’ll have customers that you respect, are loyal, and will deal honestly with you.
5. Love someone you can trust. Marriage is a long-term commitment, hopefully a lifelong one at that. The person you choose to marry does not need to be like you, but he or she should complement who you are and vice versa. Marriage can be a blessing, but for some folk it is a curse. You want to marry an individual that shares your values and will stand with you for better or for worse. Fail that and you may face an emotional and financial catastrophe through divorce.
6. Create a rainy day account. Life’s emergencies come at you, often without warning. Besides general savings and retirement accounts, you will find it very helpful to have a rainy day account. That account should be funded regularly and tapped only when your other financial options are exhausted. This can mean during periods of unemployment, when an unmet medical bill is received, or following an accident or other life event. Maintain this account separate from your other financial accounts and keep it well funded.
7. Share the wealth. We live in an increasingly secularized society. Nevertheless, many Americans still prize the country’s foundational ethos of helping one another especially those in need. Government can only do so much — you can do far more and with a much more nuanced purpose. Resolve to give purposely and to give with purpose. Help those you love, including your neighbors, people in your community, and individuals you will never meet or see. Make a difference by doing your part to make the world a better place.
When you’re ready to invest money, hire a financial advisor to guide you through this process. If you find an individual that can help you maintain and increase your wealth, then you have found someone worth keeping. Expect to pay fees and other charges for this service, and learn everything you can about investing. You should be able to make many decisions on your own, perhaps making investments from your own Internet-based account.