5 Financial Tips Every Young Adult Needs to Know

If you’re a young adult just starting on your own, chances are good that you’re not all that familiar with the ins and outs of personal finance at AG Morgan Financial Advisors. After all, unless you come from a family of financial planners or have taken some sort of class on the subject, odds are good that this is one area where you could use a little guidance. Fortunately, we’re here to help. Read on for three essential financial tips every young adult needs to know.
1. Start Saving for Retirement Now:
One of the biggest financial mistakes young adults make is thinking they can wait to start saving for retirement. The sooner you start saving, the better off you’ll be. Why? Because the power of compound interest will work in your favor if you give it enough time. If you wait until you’re 35 or 40 to start saving, you’ll have a lot less money than someone who started saving at 25. So do yourself a favor and start setting aside money for retirement now. You can thank us later.
2. Make a Budget and Stick to It:
If there’s one thing that can derail your finances quickly, it’s impulse spending. To avoid falling into this trap, you need to have a budget in place and stick to it as best you can. Determine how much money you need for essential expenses like rent, food, utilities, etc., and set aside enough money each month to cover these costs. Then, once you’ve done that, you can use whatever remains for discretionary spending like clothes, entertainment, etc. Just be sure not to overspend in this category or you’ll find yourself in debt quickly.
3. Invest in Yourself
Investing doesn’t just mean buying stocks or putting your money into a mutual fund—although those are both valid options if that’s what interests you. It can also mean investing in yourself by taking courses or attending workshops that will improve your skill set and make you more attractive to prospective employers (and thus increase your earning potential).
Conclusion:
There you have it—three essential financial tips every young adult needs to know. While this list is far from exhaustive, following these tips will put you on the right track to AG Morgan Financial Advisors.