When the topic of money is broached, you immediately assume that you’re talking about a husband and wife chatting about bills, a family wondering how they’re going to save more for college for the kids or that new couple contemplating buying a home or sticking around in the rental for a few more years.
But what about the younger crowd, a generation of individuals that are in college or just graduated, most of whom aren’t really that familiar with money. Sure, they may have had a part time job to pay for a few books or a car payment, but have they really started to manage money in a way that would be something even close to emulating their parents.
Not a lot changes realistically as far as the advice you can give someone who is just setting out on their own so to speak as far as money goes. You have to have a budget, know what you make, what your expenses are and just how you’re going to manage both and also find a way to save in the process.
Even though you’re not worrying about mortgage payments or retirement at the moment, saving money is paramount when you’re in your 20s for the simple reason that you should have more ability to do so based on that very same lack of expenses.
Beyond the budgeting element, the post college crowd also needs to establish a few key landmarks in order to establish themselves as a viable candidate for things like credit and looking promising in the eyes of a lender, if and presumably when that time comes.
That includes starting out with a basic, interest checking account so you can earn money on what you make. Try to find one that not only pays you to have it open but also isn’t so concerned with a minimum balance.
And as long as you’re opening up a bank account, you should find a credit card that is equally promising. You want to ensure the limit is low (mostly due to the interest rate probably being anywhere for fair to poor), but also not shy away from a credit card that isn’t traditional. Remember the goal is to establish credit, and that most likely will happen with a department store credit card because they’re a little more lenient as far as who they give the card too. The important element is not racking up charges but instead using it, paying it off, then using it again to keep that payment history and cycle on the positive.
Being smart with money truly has no age limits or restraints so being 20 something should be no different than 40 something with budgeting and using common sense leading the way.
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