you will hopefully love your whole life. You likely have little to no strings attached, haven’t gotten married yet, had kids, or bought your first home. The future is stretched out before you, so be wise in your investments now so you’ll have enough later when you need it. Retirement may seem like an eternity away but it will come sooner than you think. And there’s also your kids’ college to think about before that!
1. Start paying off credit card debt: You may have incurred quite a bit of debt as a college student, but don’t let it get away from you or define your life for the next several decades. Wipe the slate clean, as God knows you’ll need to use credit when life really starts to throw curveballs. Credit card debt is a high-rate debt, which you should pay down even before low-rate debt like school loans. If you can, pay more than the minimums on your cards and never miss payments. This is a great way to build your credit from a young age.
2. Start your retirement fund: The earlier you start saving, the bigger nest egg you will have once retirement hits. This way, you can give your money decades to grow, thereby maximizing those dollars by fully taking advantage of your company’s 401 (k) match. Starting a retirement fund now should take priority over paying extra on those student loans, if you have to choose. Let’s put it this way: you can save 10 to 15 percent of your income now or wait and save 25 percent in your late 30s or even 35 percent in your late 40s to get the same result, says The Washington Post. Start off by investing conservatively in stocks while establishing a relationship with a proven stock fraud attorney like the pros at the Thomas Law Group.
3. Build an emergency fund: You will need this when your car breaks down, spend unanticipated time in the hospital, or lose your job. With the majority of 18- to 29-year-olds claiming they have saved nothing for emergencies, you won’t have enough money to fall back on when you need it most. Be sure to have at least six months of expenses if you are single; if you’re married, have three months saved in a liquid account. Open a separate account at the bank and add $100 a month through automatic deposit.
4. Build your credit: This means using credit responsibly and making payments on time. While you’re making regular payments on your student loan payments and credit cards, check your credit score frequently. Take advantage of the free credit reports offered by the three major credit reporting agencies and check them every year. Make sure there are no mistakes. If there are discrepancies, do something about it and contact the creditors to correct them. Did you know only a third of 20-somethings pull their credit reports yearly?
Follow these recommendations and you will be off to a great start!