- Set a budget
- Set up automatic payments
- Set up and contribute to your savings account
- Build credit
- Invest in yourself
Set a Budget: When it comes to setting a budget, be realistic. You can live within your means and still save money. Even if you’re saving only five dollars a month, it is better than nothing. In today’s world, many young adults live paycheck to paycheck. Living this type of lifestyle makes you vulnerable to life’s inconveniences. Let’s say you’re on the way to work and you hit debris on the road and have to replace your tires. If you don’t have any savings available for this you will more than likely need a loan to replace your tires. One small inconvenience can cause you to slip into debt and stay there.
Set up Automatic Payments: Setting up automatic payments helps keep your monthly expenditures out-of-sight and out-of-mind. Paying your bills with automatic payments takes care of the “must-dos” in regards to your monthly utilities etc. Once the automatic payments have taken place, you are then left with luxury and savings funds. This helps give you a glimpse of what you’re really able to spend on things others than bills, rent etc.
Set up and Contribute to your Savings Account: Saving money isn’t fun at all, but definitely worth it. Having funds for a “rainy day” can save you in more situations than you think. Whether it’s new tires, taking your pet to the vet, or replacing your air conditioning unit, having savings built up will give you the financial cushion to pay for the unplanned expenditures.
Build Credit: Building credit can be a daunting task, but it’s not as scary as it seems. Apply for a card with a reasonable limit and spend only 30% of that limit. This helps build your credit so you can apply for a car loan, home loan or student loan down the road. Every month pay the credit card debt back in full. This ensures that the compound interest of the card doesn’t increase to the point where you are unable to pay the principal of what you owe. Use your credit card for things such as gas or groceries and set the money aside to pay for it at the end of the month. Before you know it, your credit score will begin to grow!
Invest in Yourself: Contribute to your retirement as soon as you can. Look for jobs that offer quality benefits. Most employers will match what you contribute, which is an amazing perk. Increase your contributions each year and before you know it, you will see that your retirement funds are substantial enough for you to retire and comfortably live off of what you have saved. If you don’t have a job that offers benefits, you should consider one that does, or seek guidance from a financial advisor to start investing on your own.