You may not find yourself thinking much about financial planning while still in your 20s. But this is a prime time to get the ball rolling and develop good financial habits that will last your whole life. So, along with studying and finding your way in your new career or workplace, here are 4 other manageable financial things you can do to set yourself up for life.
Check Your Credit
Many Americans aren't even aware that they have the right to check their credit histories once per year for free at annualcreditreport.com. But not only can you do this, you definitely should. Keeping tabs on your credit makes you more aware, keeps errors from damaging your score, and helps prevent identify fraud.
Start Retirement Contributions
The best time to start contributing toward your retirement is now, no matter what age you are. And contributing in your early work years means your money--even smaller contributions than you'd like--has many years to grow on its own. Take advantage of the magic of compounding interest, which will help ensure you are required to contribute less of your hard-earned money than those who start later. Working with a professional financial planner can help you develop an investment portfolio that matches your own risk tolerance levels.
Whether its student loans, credit cards, or home mortgages, debt can become an anchor if you don't learn how to manage and control it from the beginning. If you have debt, keep a written record of things like interest rates, when rates adjust, the balance, and when payments are due. Prioritize debts with higher interest rates to get the most bang for your debt-payoff buck.
One key to staying out of debt is to build a healthy savings that you can use to avoid having to go into debt when emergencies (or other expenses) arise. Building savings can be hard when you're a young person who doesn't earn a lot, but even putting away small amounts can help you accumulate money and stay in the habit of doing so. The adage to "pay yourself first" means putting money into savings (and retirement accounts) before--not after--you pay your monthly bills. If you do have some extra money to work with, talk with your financial planner about learning how to invest in the stock market in taxable accounts.
If you can focus on only one or two of these financial planning aspects at a time, it will surely help you feel more in charge and more confident with your money.
Contact professionals like Family Financial Partners to learn more.