Top 5 Financial Steps Young Adults Should Take Immediately
Becoming an adult is hard. There are so many things that are not taught in schools that many of us have to figure out on our own. From changing your own tire to knowing what to do with your income there are so many things that remain a mystery to us until we start doing our own research. And don’t we all dream about being financially independent and secure where we do not have to live with our parents? But dealing with money can feel stressful because it can feel like you don’t know where your money is going. So keep reading to discover the five financial steps all young adults need to be taking with their money!
Young Adults Financial Step #5 – Create A Budget
The first thing that everyone needs if they have a job is a budget. You need to know what your expenses are each month. Make sure to list out your rent, insurance, gas, food, internet and so on. All of your basic needs to live must be written down so you know the minimum of what you always need to make.
Creating a budget allows you to know where your money is going. If you know where your money is going you will be able to spend money more freely on things that you want like electronics or vacations. This can also tell you where you are overspending and need to cut back on. There are lots of apps that can help you make and stick to a budget.
#4 – Never Buy A New Car
One of the biggest mistakes people make with their money is buying something new, big, and shiny like a car. Buying a car is a time-consuming process because you want to make sure whatever you get is safe and reliable for you to be in. That is why many people go and get a new car.
The moment a new car goes off the lot it instantly loses value. If you’re buying a new car and you do not have the cash to purchase it, you are stuck with a car loan for years. So don’t make this mistake and buy a new-to-you car instead.
#3 – Pay Off Debt
People say there is good debt and bad debt, but in reality, there is just debt -money that you owe. This can be because you bought a car, a house, a college degree, or even debt just from shopping. Debt can affect your life and what you want to do with it.
The best thing for you to do is to start paying off your debt. Look at what you owe and start by paying off your smallest debt first. We know that once your first debt is paid off you are going to feel accomplished making you want to pay off the rest. You also want to focus on the debts that have the highest interest rates.
#2 – Stay Away From Credit Cards
One of the financial steps young adults ingnore most often is starting away from credit cards. It seems like any store you go into nowadays is trying to get you to join their member’s program and sign up for a credit card. The only reason why companies want you to have their credit card is to charge you a ridiculous fee with interest.
That is why you need to make sure you do not have any credit cards. Credit cards do not mean you have money to spend. Even just owning one for emergencies can make you want to use it on little things. Be smart and control your money without using any credit cards.
#1 – Have Money In Savings
Something you need to do when you have an income is to always put some money away in savings. Creating a savings account and adding money into regularly will help you achieve your dreams in life and add a feeling of security. Feeling secure and feeling like you can rely on your savings if something happens will keep you on the right path with money.
You can even be saving money for a specific reason like a trip or a new computer. Having money in savings can also help you in case something happens and you lose your job. No matter what you are doing with your income you must have some money in savings. This is by far the most important of the financial steps young adults need to take.