Daily Archives: February 16, 2017

Financial Advice for Young Adults

Rarely is money management taught in grade school. Occasionally, you’ll see a course here or there in high school but again, that’s rare. So, how are young adults fresh out of school to know how to manage their finances for assurance of a solid future? Here are some tips for older teens and young adults getting started in life, from your trusted securities lawyer.

  1. Go to college: You don’t have to spend a fortune on college, but it’s true that your earnings potential increases in a major way when you can claim a college degree. To make it more affordable, attend a two-year community college first then transfer to a four-year university. Bonus: you can take money management courses in college to further help you make wise savings and investment choices after graduation.
  2. Start planning for retirement with your first job: As soon as you land that first job out of college, sock away money for retirement. Sign up for your company’s 401(k) plan, max out your company match if offered, and set up automatic deposits from each paycheck into a savings or retirement account, such as an IRA.
  3. Don’t go crazy with the credit card. We know how tempting a credit card can be to someone who’s new to them. They represent buying power that you never had before until now. We get it! However, use those credit cards sparingly to avoid those high interest rates that can, over time, add up to way more than the initial purchase. Large credit card balances are traps. It’s often very difficult and time consuming to get out of those traps, especially with the longer you wait to pay them off. This is not the time to be incurring debt. That will come later with a house, kids, college and the like.
  4. Choose a life partner wisely. Love is at the heart of any relationship of course, but beyond love is compatibility. This is important not only in agreeing on how many kids you want, what kind of house you want or where you want to vacation, but also encompasses those very real, deep-down values about money. Choose someone who has the same values as you. If you are a steadfast saver but your significant other is a careless spender, this pattern will follow you throughout your life. Considering most marital discord revolves around money arguments, this is not the way you want to start out on your journey of marriage together.
  5. Plan for emergencies. There will come a day when you face the unexpected: medical bills, car repairs, house repairs, divorce, job loss, etc. If you don’t have liquid cash set aside to pay for those hardships, you will be forced to borrow (from friends, family, the bank, or – worse – credit cards) to fund your emergency. Make sure to save at least six months to a year of living expenses to weather any storm.

As a young adult coming into his own, heed these financial tips to ensure stability as you grow from a fresh-faced graduate into a fully functioning member of society.