5 Pieces of Financial Advice for Young Adults

We know that financial planning for young adults isn’t always top of mind. But, planning for your financial future early is one of the easiest ways to ensure a successful adulthood. Your financial health is contingent on a number of factors: earnings, savings, monthly expenses, and debt.

As a young adult, maybe you have student debt. And, while it may seem intimidating, it’ll pay to build a payment plan early, commit to it, and get it paid off. Or, maybe you’ve always wanted to retire early. If that’s the goal, you’ll want to start saving now to realize it. However, with a wealth of apps, advisors, and financial tools available online, it’s never been easier to work toward your ideal financial life.

Tally Your Everyday Expenses

First things first, you’ll want to understand your monthly budget and factor in having to pay income tax. Then, whether it’s rent, groceries, car payments, health insurance, Internet, or any other monthly payments, you need to work out how much you’re spending. And, if your goal is to boost your financial security, you should be putting money away every month.

Create an Emergency Fund

On the subject of saving, having money set aside for emergencies can be a literal lifesaver. A money market account is a great option for emergency funds, since they usually yield higher interest than standard savings accounts.

It’s easy to think you’re invincible when you’re young. But, what happens if your car breaks down? Or your dog needs to go to the vet? Or you’re hit with an unexpected tax bill?

Having a modest fund for emergencies can help you overcome these hurdles and, hopefully, stay on track. And, of course, that’s not to mention the peace of mind you’ll experience knowing that, in the event of an emergency, you have things covered.

Pay Off Your Credit Card Debt

You’ve heard it a thousand times: debt is bad. But, carrying a balance on your credit cards is even worse than bad. By not paying off your card, you’re functionally giving free money to the credit card company. And, with some of the highest interest rates, owing to credit cards is pretty much just throwing money away.

If you want to keep the convenience of credit cards without risking your credit history, you might consider a debit card. By only spending money you have in your bank account, you’re at least preventing yourself from accruing debt.

Start to Save Money Now

As of 2022, nearly half of Americans had no retirement savings. Company-sponsored retirement plans are a really solid option for young adults who are saving for retirement. When it comes to retirement, though, it’s essential to start early. We’ve said before that you should save early and save often. Compound interest rewards an early commitment and, in time, will grow exponentially. Because of this, a dollar saved today is massively more valuable than a dollar saved in twenty years.

Hire a Fee-Only Financial Planner

At Wiser Financial Group, we offer online financial planning services to help younger individuals build sound personal finance habits. In Michigan, high school students in the eighth grade are now required to take a financial literacy course. Not only does this show the importance of basic financial education, it underscores how essential it is to teach young adults how to manage money and avoid debt.

With our fee-only structure and a convenient virtual setting, it’s more affordable – and accessible – than working with a commission-based financial advisor. Whether you want help growing your retirement account, calculating your living expenses, or just ensuring you have enough money to live, our team can help.

Need Advice on Saving Money?

If you need more financial tips for young adults, don’t hesitate to reach out to us. With the goal of helping you manage your finances, we can help you understand income tax, federal and state obligations, retirement options, and so much more. Our team will work to understand your financial situation, develop an investment strategy, provide unbiased advice, and – most importantly – try to keep more money in your savings account.

Are you ready to get started?

If you’re eager to begin your financial journey, the team at Wiser Financial group is here to help.