One of the most vital aspects of growing up is learning to manage our money. It is unfortunately, one of the least covered things in our schools and upbringing. Some parents spend the proper amount of time on this, but the vast majority never get around to it. Following are six steps to get off on the right foot financially when you head out into the world. Hope there is still enough time to work this as well into your New Year Resolution 🙂
Learn to budget for the long term
Most young professionals budget for next month rather than next year, much less the next thirty years. Learning to budget for the long term is a vital skill that you must learn quickly to get your financial world in order. Consider the future from the very start and you will be ahead of the majority of young adults getting started.
Forget the “rewards” when they make you overspend
Rewards cards are all the rage these days but they are a bit of a spending trap. If you spend money on a credit card simply to get a reward, you are kind of defeating the purpose. Instead, get the best rate you can get. That will give you more than enough money to get your own rewards. If you can do both, great.
Learn to multi-earn
Multi-earning is exactly what it says it is. A person is capable of going out and earn as much as possible and there is nothing wrong with that. The best situation is the one where you have several different avenues of income. This might be a blog, a side job or even a hobby. Whatever the case, you should always have some ways of earning on hand that you are good at. It will help you be more diverse as well.
Make your emergency fund a habit
Having an emergency fund is the single most important thing you can do financially. Put that money back every single paycheck like clockwork and never think you have enough. This will keep you insulated when the economy dives, you lose a job or some other emergency pops up. Make it tough to get to as well so that you don’t tap into it for every little thing.
Plan to not have Social Security
Social Security is no sure thing and you can be reasonably sure that you will need plenty in retirement. This is part of that budgeting long term thing we mentioned above. Plan for your own retirement and if other funds are available, you will have added security.
Get a solid accountant you can trust
You can follow all the advice in the manual and mess up a tax return to ruin it overnight. Getting an accountant to take care of your taxes and paperwork is a cost that is worthwhile at all times. This is especially true if you ever get audited.
Have a financially rewarding year everyone! Good Luck!