When you’re young, you often feel like the world is your
oyster and that, though your actions may have consequences, those consequences
won’t come until much later. In truth, though, those consequences tend to come
around more quickly than you might think- especially when it comes to your
finances. Plus, chances are that in your youth, you’re not earning as much as
an older adult, a fact that makes irresponsible spending all the
more...well...irresponsible. To get your financial life started off on the
right foot, you need to start making smart financial choices now. The good news
is that making those choices is easier than you might think. It’s all about
making small steps in the right direction and doing so consistently.
Open a 401(k) and Handle it Responsibly
While it’s tempting to physically take (and probably spend)
as much of your regular paycheck as possible, that’s really not a smart
strategy. As young as you may be and as far away as the future and things like
retirement may seem, they will be here sooner than you think, and that means
you need to be preparing for them. One of the best and easiest ways to do that
is by opening a 401(k). This strategy is even smarter if your employer is
willing to match your contributions. Take advantage of that match if it’s
available, but don’t feel like you need to contribute to your 401(k) to the
max. You still need enough money to survive and even to have a little fun.
Don’t Buy Things You Don’t Need
This one should go without saying, but avoid those frivolous
purchases, even if you don’t think they’re costing you much. Sure, that novelty
bracelet or that cool vintage t-shirt may only be $5, but if you think that
way, those small purchases can easily add up into big debt. This isn’t to say
that you can’t splurge from time to time, but keep it in check. One small treat
per pay day, after your bills are paid and you’ve stashed some money in
savings, is more than enough.
Use Credit Cards Responsibly
Many young people are afraid of credit cards
and the debt that often goes along with them. However, don’t be afraid to get a
card if you can. As long as you use it responsibly- making small purchases and
paying them off as you go- you should be just fine. In fact, you should be better
than fine because you’ll be building your credit. If you’ve already made credit
card mistakes, however, focus on paying off those balances and avoiding late
fees. Once you’re back in the clear, you’ll have a fresh start to do things
right with your credit card.
As you can see, there are a lot of ways to take
control of your finances, even at your age! Start taking these wise steps now,
and you’ll see big pay-off, literally, in the future.
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