Grow your emergency fund
Even when you don’t have many expenses, it makes sense to start building a buffer for the unexpected. And when you’re on your own, paying rent and other bills independently, it’s especially important to build up a cushion in case something happens. Start saving however you can, with a goal of having three to six months of living expenses saved up.
Track your spending
Looking critically at how much you spend can help you make decisions about your priorities. There are plenty of apps and services that can do this automatically, or you can record it yourself in your method of choice. You might want to observe your habits for a month or two before you start making budget changes just to see where your money goes.
Save for retirement early
When you’re young, it’s easy to think that retirement will never come. But if you start saving early, even in small amounts, market growth and compound interest can do a lot of heavy lifting for you. Opening a Roth or Traditional IRA while you’re young, putting away even $20 from every paycheck, can put you in the habit of long-term savings that can pay off when you’re older without putting a financial burden on you now.
Spend less than you make
This one might seem obvious—and it’s sometimes easier said than done. But the basics of budgeting and good money management are sometimes as simple as that.
Think about building credit
There are lots of ways to build your credit when you’re a young adult. You can apply for your first credit card, and if you’re not approved right away, you might consider a secured card. But plastic isn’t the only way to build credit. Taking out an auto loan—even with a parent as a co-signer— is also a good option to show you’re responsible by making on-time payments consistently.
Pay your credit card bill in full
When you’re working on building your credit, you might be tempted to swipe your credit card more than you should. Paying your credit card bill in full each month saves you from paying interest on purchases and keeps your balance from creeping up without you noticing.
Have a budget you can stick to
When you’re building your first budget, it isn’t always clear where to start. That can lead people to either blow off budgeting (not a great idea) or to overcomplicate it (also potentially bad). When you make it too complex, a budget can be hard to stick with. The 50/30/20 budget might be a good place to start.
Learn all you can about personal finance
Learning more is a key part of mastering your personal finance. You can increase your knowledge through books, articles, videos and podcasts. And programs like RMCU’s Mastermind course can give you a solid foundation as well. Plus, it’s free!
Register, and take the online course to become a money mastermind.
*Non RMCU links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Rocky Mountain Credit Union of any of the products, services or opinions of the corporation or organization or individual. RMCU bears no responsibility for the accuracy, legality, or content of the external sites.
Non RMCU links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Rocky Mountain Credit Union of any of the products, services or opinions of the corporation or organization or individual. RMCU bears no responsibility for the accuracy, legality, or content of the external sites.
