Procrastination – a “disease” the majority of mankind suffers from. It is unfortunate that procrastination frequently affects our finances. Many people do not begin focusing on their financial wellbeing until shortly before they want to retire. Beginning to manage your finances as a young adult can reduce stress and increase your likelihood of having the money you need to meet or exceed your goals.
Young adults have unique financial challenges. The following are a few topics we like to discuss with our clients; particularly those clients that are young adults.
- Be aware of the power compounding can have by saving at an early age.
- Utilize employer benefits:
- Maximize employer matching in a retirement account.
- HSA, FSA, and dependent care accounts.
- Set up a budget and monitor your spending.
- Set aside money for an emergency fund.
- Use your credit card wisely and avoid carrying a balance.
- When you make decisions, keep your credit score in mind. Having a high credit score can save you money as you make major purchases throughout your life.
- From a strictly financial perspective, paying down debt is not always the best option.
- Depending on your goals, renting a living space may be a better investment than buying.
- Buying a car may make more sense than leasing a car.
- Having the proper types and amounts of insurance is critical.
It is natural to procrastinate but waiting can impact your financial future significantly. Please do not forego taking care of your financial wellbeing. If you are a young adult and have not considered any of these points, now is the perfect time to begin planning for the future.