You can make your financial goals come true by starting good money habits now. CNBC.com reports that about 78% of American adults are living from paycheck to paycheck because most individuals don’t know how to manage a monthly budget. Though it might seem overwhelming handling your finances at a young age, financial literacy advocates believe that it’s crucial for you to learn financial strategies while you’re still young!
You can eliminate your student loans, achieve your financial goals, and treat yourself from time to time by simply following these tips:
Follow a Budgeting Strategy
Budgeting is an important financial strategy— and yet, most adults struggle with it. Though it seems like a lot of work, proper budgeting can help you set money aside for your needs, wants, and even for fun. Catherine Azeles of advisory firm Conrad Siegel suggests that you allocate a percentage of your income towards your bills and monthly expenses, before considering spending for your wants and your fun expenses. By properly dividing your income, you can cover your necessities, and still have enough money to treat yourself.
Learn the Basics of Personal Finance
Budgeting is just one of the main factors involved in personal finance. If you want to manage your money like a pro, you’ll have to understand the basics behind investing, loans, credits, taxes, and insurance. These factors are covered on AskMoney.com, which contains introductory articles and in-depth guides to various financial topics. By maximizing these financial resources, you can learn basic financial tips for your everyday expenses, and even pick up strategies that can help you grow your money. Knowledge is key, especially when it comes to personal finance!
Start Paying Off Your Student Loans
It may sound overwhelming to start making student loan payments right away. However, you can save on interest rates and be free from debt at an earlier age if you start the habit early. To make this process less daunting, you can use the Debt Payoff Assistant app so that you can slowly pay off your debt using the snowball method. Through the app, you can easily calculate how much you need to set aside each month and track your progress on your loan payments.
Monitor Your Credit Score
By paying off your student loans at an early age, you can build up your credit score and enjoy unique perks. To check your credit score, CNN.com recommends that you take advantage of the free annual credit reports from Equifax, Experian, or TransUnion. These reports allow you to identify and address the issues in your credit accounts. These include missed payments, closed credit card accounts, and extreme credit utilization rates, which can all lower your credit score. A lower score limits your chances of having multiple loan options, and increases the interest rates on your loans.
Save Up for Your Retirement
Who doesn’t want to retire comfortably? If you want to enjoy your future, then start investing in a retirement account like a 401(k). Employers that offer this plan can match your contributions so that you can get more bang for your back when you retire. Alternatively, you can also opt for a Roth IRA account through an online broker, so that you can save for your retirement on your own.
Managing your own finances is a huge responsibility, but there’s no better path to a secure and comfortable life. If you start practicing good financial habits like those listed above, your future self a few years down the line will definitely thank you. For more information visit us at CollegeCandy.com.