5 Financial Tips for Young Adults

Posted by on Friday, April 18th, 2014 at 9:01pm.

You'll hear a lot of older people telling young adults "If I would have planned things differently this is what I would have done". When you start looking at the advice that is being given, there are at least 5 common suggestions being made. If you're a young adult, you'd be wise to listen to some of the advice that you are being given so that you can strategically plan your finances for the future.

1. Start saving - now!

Even if you only have $5 that you can put into a savings account per week, start doing it. It will at least put the intention into place and get you started. Then, you can begin looking at ways of increasing your savings as you go along.

2. Purchase a home

Although it can be difficult to actually purchase your first property, it gets much easier later on when you're ready to upgrade to a bigger and better home. If you only have enough money now to purchase a condo, get started. Some of the money that you'll be putting towards your mortgage will apply to your home equity. While it won't be a lot at first, you'll start to see it adding up throughout the years. Once you have reached retirement age, your home can be a safe and reliable nest egg for you.

3. Watch your credit

It can be tempting to whip out your credit cards and make purchases with them when you're young. You know that your next paycheck can cover things and that you have control over your credit situation. You need to be careful though. Credit cards can add up quickly and often it can be too easy to pay with plastic. Keep a good eye on your credit and use your credit card sparingly. Stay out of the credit card trap and make sure that you are instead concentrating on saving money for the future.

4. Be prepared for unexpected events

You should have 3 months worth of living expenses set aside for emergencies. Things can happen in life such as losing a job, breaking a leg or other situations that you simply don't expect. When you have 3 months of earnings put aside for emergencies, this gives you a safety buffer that you can rely on should an unplanned emergency arise.

5. Make wise investments

Have a talk with a financial planner to find out what types of investments are available for you and which ones are recommended. Try not to take too many risks with your investment opportunities and always make sure that you put at least some of your money into safe investments. Your home can be considered as one of the safe ways to store your money. Owning a home is one of the best and secure investments you can make for the future.

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