If you’ve just recently graduated and have landed your first full-time job, you might think that it’s a bit soon in your career to start worrying about saving and investing what little money you have. Unfortunately, that couldn’t be further from the truth. No matter how you look at it, the earlier you start saving up, the more of a financial cushion you’ll have later in life. And, learning how to prudently manage the money you have now will surely make things much easier in the future when you are buying a home or planning to retire. Beginning prudent financial habits brings life-long rewards. These novice financial habits can help you secure some financial security and make an investment toward your future.
Have a safety net.
As you start to consider long-term career goals, make sure that you have a strategy prepared that addresses your immediate situation. For some millenials that plan should include getting rid of any private/federal student loans that you may have. With loans that have an interest rate of 5-6% or more, it’s important to pay off those loans as quickly as you can—especially when you consider that government loans are the hardest ones to pay off. There are many laws currently in effect to make it extremely difficult to forgive loans in the instance of bankruptcy. Of course, no one should actually be planning go bankrupt, but the key to a fiscally secure future is addressing debt before the rest of your life gets even more complicated. One of the last things you want is a bunch of old debt hanging over your head while you’re beginning to prepare for a family or considering buying a new home.
Beyond paying off your student loan debt, it is very important that you put away an emergency savings fund. It is certain that in the future, you will more than likely have unexpected expenses. Things like medical bills and major home repairs happen; when they do, proably be happy that you set money aside to take care of it.
Identify your professional goals.
Most millenials don’t already have their entire lives figured out, chances are you have a feel for your biggest priorities and interests. If you plan on traveling the world before you have any major adult responsibilities, your saving tendencies are probably going to look a lot different than if your financial goal is to go into an early retirement. Articulating your financial goals will help figure out how much they need to set aside every month. Some Experts suggest that millenials put aside as much as one-third of their monthly income, while others say that saving at least 10 percent is a good way to get into the habit of saving. Whichever amount you decide on, be sure to set aside capital for every one of your important goals (from retiring early, to traveling the world, to having your dream wedding) on a monthly basis so that none of your goals gets neglected.
The benefit of good saving habits is that you won’t start becoming used to a way of life that you later discover is too expensive. It’s alwaysfar easier to start out lean and work toward a more expensive lifestyle than it is to pull back on the things you used to enjoy.