While your first paycheck may seem like a lot of money on paper, it doesn’t take long to figure out that all of that money doesn’t last as long as you think it should.
Planning your financial future and setting yourself up for success may not seem like a priority when you’re a young adult, but the sooner you start, the easier things will be down the line.
Are you a young adult who wants to set yourself up for financial success but isn’t sure where to start? We’ve got you covered! Here are three must-have financial planning for young adults who are just getting started.
Say you just landed your first bill-paying job and are finally getting a paycheck — where is all that money going? While some of that hard-earned cash will go toward fun things like video games and drinks with friends, most of it will wind up going to necessities like groceries, rent, and health care expenses.
One of the best ways to keep track of where your paycheck is going and figure out how much fun money you get is building a budget and learning how to stick to it.
2. Save For Everything
Creating a savings plan can be a bit difficult when you’re trying to live on an entry-level income. But putting 10-12% of every paycheck into a savings account adds up faster than you think. And, just putting away a little bit every month will give you a fantastic jumping-off point for starting a more substantial savings plan.
While it may seem a bit early, it’s never too soon to start thinking about retirement, and putting a little bit of money away every month will go a long way in the long run. That said, your savings are for much more than your retirement. You can start a savings account to squirrel away money for everything from a trip to the down payment for a house.
On top of saving for significant life events, you should also try to create an emergency savings fund for massive unplanned expenses, like medical bills. Your emergency fund should include three to six months of worth of income.
3. Your Credit Score Matters
For a lot of young adults who are just getting started, the importance of knowing, growing, and maintaining your credit score can come as a bit of a shock. But whether you’re getting ready to move to your first apartment or already thinking about taking out a home loan, your credit score plays a significant role in your financial options.
For young adults that are new to the world of credit scores, one of the easiest ways to start building your credit score is by getting a credit card. Many banks offer starter cards that come with low maximums, so young adults who are just getting their first cards won’t have to worry about getting in over their heads.
If you’re just getting started and have concerns about setting yourself up for financial success in the future, visit https://www.sprikfinancial.com/ for more information.
Must-Have Financial Planning Tips for Young Adults
By following these simple financial planning tips, you’ll be able to begin setting yourself up for financial security and success later in life.
Are you looking for more financial advice? We’ve got you covered! Check out the rest of our site for more helpful articles today.