Getting out on your own
You’ve entered the workforce and now it is time for you to develop sound financial habits. This is a critical time for young adults who are facing the scary task of handling their own finances and learning how to manage spending and saving within the constraints of their income level. Financial planning can help you make smart decisions. Here are some tips to get you headed in the right direction.
- Establish long-term (marriage, buying a home) and short-term (vacations, new car) tangible financial goals and plan for them.
- Track your spending, learn how you are spending your money to identify ways to save.
- Prepare a household budget and stick to it.
- Establish a saving pattern. One of the easiest ways to do this is to have a portion of your paycheck directly deposited into a savings account.
- Think before you buy. Ask yourself “Do I need it?” “Can I afford it?”
- Control debt and use of credit cards.
- Make sure you have adequate insurance ( auto, health, life).
- Understand and take advantage of employee benefit plans at work. That includes health insurance, pension plans, savings options, and life and disability insurance.
- Be aware of your tax situation. Make sure the correct amount is being withheld from your paycheck.
- Participate in your company’s retirement plan and contribute on a regular basis.