For most households, graduating ceremonies are over and a new life will begin in just a few short months. Whether the grad is applying for a job or they will continue their education at a university, lifestyles will change. Eventually, the young adult will start to earn a decent living and perhaps purchase a home over time. It’s a big step and there are many foundations to lay before settling into a new home.
Here are some financial tips for the newcomer to successfully begin a life as a responsible, enterprising and stable individual:
• The Murphy’s Law Fund. Because anything that can go wrong, will go wrong, it’s always a wise idea to have a go-to fund. Unexpected expenses have the worst timing – when there’s no capital on hand to fix things. Being prepared for those stumbling blocks will make all the difference in the world.
The Murphy’s Law fund should contain a sum that is equal to three month’s salary. This amount should cover the monthly expenses just in case things take longer than expected to smooth out. Deposit a predetermined amount each pay period and forget about it.
• Enroll in the 401(k). To start saving now for retirement is the best idea of the day. Many young adults do not think about retiring until it’s almost time to retire. This method is not recommended. The time is now, because it only seems like a long to reach retirement age. It comes before anyone knows it, so ask the employer for more information about matching contributions and start saving as soon as possible.
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• Pay Off Student Loan Debt Early. Millions of people are having to repay their students loans at ridiculously high prices. It’s incredibly difficult to plan for a new vehicle or a sensational wedding, due to the high cost of everything and in many cases, low wages. Scan balance sheets for the loans with the highest (interest) rates and proceed to pay those first.
Set up auto payments through your bank and always pay more than what is required if at all possible. This will help in the long run to reduce the debt quicker. Refinancing is an alternative to lowering monthly expenses on a student loan and also try asking for a reduction on the interest rate.
There are specific remedies to successful money management. It doesn’t matter when a plan is initiated, following through is the key to success. A couple of the main objectives to obtaining financial stability are –
Live Below Your Means
Just because you have it, doesn’t mean you should spend it. Instead of going out on the town, opt for a six pack and call friends over for a game of poker, darts, girl’s night out or whatever the case may be. Cut small corners to stretch a dollar. Do things in moderation and practice smart buying decisions as these are essential keys in growing the nest egg.
Stay within The Budget
It’s harder done than said, but who said it was easy? Most checking account statements show a graph of how money is spent. Use it to find out where the dollars are being spent. It may surprise you to know where the money is going, but it will make it easier to decide what can be reduced. Once that is done, develop a reasonable plan and stick within that amount.
Operate a Small Business
Today, technology has it that you can run a business from home. However, if being tied down to a desk isn’t a suitable occupation, another profitable business could be behind a commercial juice and healthy foods truck. Easy to start businesses such as moving companies, transportation services and food trucks are just as simple to maintain. Whatever your choice is, do something that you are passionate about or at least like to do.
Many wealthy individuals began investing early in life and although contributions were made through the 401(k) plan, diversifying funds has certain advantages. Another key to a successful lifestyle is to light many fires. Most people who live comfortable lifestyles say that having goals helps immensely. Getting a good education is not a guarantee of landing a job on the top floor. One thing is for sure, however, wishing for it is not enough.