Smart Financial Tips for Young People

Smart Financial Tips for Young People
  • Opening Intro -

    You're approaching the end of high school or have just finished, and you have the world by its horns.

    Or at least you think that you do.

    The next few years of your life will be critical as the decisions you make will impact you for years to come, perhaps for the remainder of your life.


Much of what you make of your life will be based on your financial decisions. Poor decisions, such as getting in over your head in debt, can have a lasting impact. Good decisions, such as saving up your money to purchase a new car, can be viewed positively. The following are some smart financial tips for young people:

Get educated

– A high school education won’t take you that far unless you happen to be the next Bill Gates. Granted, some people have a talent that can be parlayed into something bigger, but not many of us have that. Consider getting pursuing your higher education, taking a certificate program or obtaining an associate or bachelor’s degree. Obtaining an associate degree can increase your lifetime earnings by $400,000. [1]

Control your credit

– Even with credit tougher to obtain these days, consumers can still find getting a store card easy to do provided that they have a steady job. These cards can lead to other forms of credit including a Visa or Master Card, and the first auto loan. Know what credit will cost you and plan on controlling it or it will control you. Delay purchases until you know you can afford payments; seek out favorable terms and come up with a large down payment.  Pay cash for purchases wherever possible.

Create a reserve

– Emergencies happen and when they do you may struggle to raise enough cash to cover these expenses. Before making a big purchase – such as a new car or a house – set aside an emergency fund to cover these contingencies. Dipping into the fund you have instead of going into debt will mean that the expense is put behind you instead of lingering for months, if not years. [2]

Start investing

– Most likely, by the time you reach your retirement age, your financial picture will be far different from what today’s retirees experience. For one, Social Security may not still be around or it could have changed to the point where the pay out is much lower. Medicare may be gone, part of a national health plan. That means you may need to depend largely on yourself to ensure good income for your golden years. Begin investing early, setting aside money for your children’s college education and for your later years. Find a financial advisor you trust and work with her to create a reasonable investment plan.

Share values

– The person who you marry should share your financial thinking including work, raising children, career choices, spending, buying a home and more. Even after you marry, there will be times when financial differences will arise. Many couples do not know how to handle conflict – you both need to agree on the essentials and learn the art of marital negotiation. [3]

All told, your young years are when you have the most energy, so pursue your dreams with vigor. Time and tide wait for no man; the year’s march on and seem to speed up as you age. Don’t allow your dreams to be swept away in a sea of financial mistakes.


[1] Lorain County Community College: College Graduates Earn More

[2] Bankrate: Building an Emergency Fund; Laura Bruce, Dec. 29, 2006

[3] Crosswalk: How to Negotiate Wisely to Maintain Marital Harmony; Dr. Greg Smalley; April 12, 2006

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About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".