You are currently viewing 8 financial tips for young adults |  News

8 financial tips for young adults | News

Financial realities can be a tidal wave when you’re a young adult. You are given new tasks, such as how much money you need to spend, save, or invest. It can be frustrating and difficult to understand. Even searching for financial help on the internet can be daunting. It’s easy to get lost in a sea of ​​financial jargon when you have to sift through pages of difficult vocabulary phrases.

BET.com spoke with Rodney Griffin, a Certified Financial Advisor at Northwestern Mutual, to provide young adults with 8 practical financial tips for young adults. These tips are easy to understand and can be applied to any lifestyle.

According to Griffin, you should always demand a higher salary when starting a new job. Don’t be afraid to ask for extra money even if the job initially pays what you expect.

For example, if you tell an employer you want to make 80,000 a year and they give you 80,000, go back and ask for 90,000. Employers may meet you in the middle. Most employers will negotiate with you and you will end up making more money than you originally expected. Understand your leverage.

  1. Get an idea where your money is going

Keep track of your money with a budget. Budgeting is essential for sound finances. “That doesn’t mean you have to be responsible for every dollar you spend, but be aware of your finances as it relates to your goals,” Griffin said.

In the words of Dave Ramsey, a budget tells your money where to go, instead of where it went. A good budget to try and follow is the 50/20/30 rule, popularized by Senator Elizabeth Warren. The rule says to split your after-tax income, with 50% going to your needs, 30% to wants, and 20% to savings. Don’t worry, if you can’t divide your income by each percentage, adjust the percentages to your individual needs and do your best to stay within your budget. While this rule can be a great baseline, it can be difficult to follow for those who earn less or live in places with high living costs, shows Fifty Thrity Twenty, a project created by a graphic designer working for the federal government.

  1. Contribute to the 401(k) offered by your jobs

Before you get your first paycheck, contribute to your company’s 401(k) matching program, Griffin said. When companies match their employees, they directly contribute money to your 401(k). For every dollar you save, your employer matches your contribution.

In addition to your retirement account, invest early in mutual funds and ETFs. Start as soon as possible, even if it’s only 100 a month, Griffin said.

As a general rule, you need to control your expenses. You don’t have to buy everything at once or go for the most expensive option. Griffin advises you to buy only what you can afford.

You don’t have to worry about a physical withdrawal from your account when using a credit card. Each pay period, pay your credit card bill in full.

A savings account is an account that you don’t use regularly, and normally has a limit on how many times a year you can withdraw money. Most of the time, a savings account has higher interest rates than a checking account. Consider opening a high-yield savings account for maximum fund growth.

“Employees of a company or an organization, those who file a W2 tax return, should have 3 to 6 months of savings. For those who are self-employed, filing a 1099 tax form, should have 6 to 12 months of savings,” Griffin said.

Your career is an investment in your lifestyle and your family, but if you get sick or injured it can quickly go off the rails, Griffin said. Have the appropriate amount of insurance, in addition to what your business provides, to protect your life and your assets. We protect our TVs, our phones and our cars, so why not protect the most precious thing: yourself and your health. The insurances to consider, even when you are young, are disability insurance, life insurance and long-term care.

Do you have a hobby or a talent? Or maybe you’re good at teaching or marketing products. Find something outside of your career to create a residual income stream, Griffin said.

Make sure you have fun while doing it so you can be consistent. Your side business could become your full-time job.

  1. Remember social media is not real life

Don’t fall for social media gimmicks, Griffin said. Social media is not real life, and people can show you anything they want. Many people don’t become rich or have a successful business overnight. Do your research if it sounds too easy to make a lot of money, it might not be true, Griffin said.

Work with a financial advisor as soon as possible, they’re not just for the rich, Griffin said. Financial advisors can help anyone in any financial condition.

Leave a Reply