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You've likely been given some great advice from a friend or family member that has stuck with you since you heard it. Here are a few financial tips that many will likely wish they knew sooner.
Start saving now
- No matter how much or how little you make, it's important to save now for the future. It's likely that you will have goals for bigger and more expensive things. Maybe you want to start a business or buy a house. Those things cost a lot of money so it's best to start planning for them now.
- Pay yourself first. Instead of determining what to save based on "what's left over," set aside some money in savings before doing anything else with your money.
- You'll need a financial cushion for when unexpected bills come your way.
Buy only what you can afford
- It's best to start with a budget and stick to it. Be sure to include funds for an emergency, long-term savings, and also earmark a little for "fun money" as well.
- Live below your means. It's incredibly easy to spend more as you begin making more - but beware - if you do, you'll risk never getting ahead.
- Think of money as a tool. To get the most out of it, you have to know how to use it responsibly.
Build your credit
- Credit is hard to establish, easy to ruin and difficult to repair.
- Build your credit responsibly. When using credit cards, it's best to pay your balance to zero each month.
Don't take on too much student loan debt
- While in school, it's impossible to know if your future salary will support your student loan payments - at least at first. Having a high student loan payment might actually hold you back from other goals - buying a house, having kids or changing careers, for example.
Take advantage of free money
- If your employer offers to match contributions to your retirement plan, invest at least enough to get the full match. Otherwise, you're literally leaving money on the table.
- Have a plan and consult a professional for guidance if you need it.
Understand compounding interest
- With compounding interest, your money earns interest and then your interest earns interest. Over time, this helps your money grow faster.
- There can be a downside, too. Compounding can work against those who have loans that carry high-interest rates, such as credit cards.
Learn about investing
- Read books, consult a professional, or take classes on investing.
- Never invest in something you don't understand - learn the risks first.
- Don't put off investing. Try your best to invest regularly even if it's just in small increments.
The above tips are intended to provide general information and shouldn't be considered legal, tax or financial advice. Should you have questions about your individual financial situation, it's always good to consult a tax or financial advisor.
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