Managing your finances can be difficult during your college years. However, it is important to be financially prepared before entering the real world. Life happens, and there are several things you should do to avoid financial crisis. Setting goals for milestone ages is a good way to be prepared for what life may throw at you, and here are some financial goals you should reach by the time you turn 25:
Create an emergency fund. Sometimes your car breaks down or your utility bill is higher than usual; it is important to have money set aside to cover these expenses. Saving $20 of your paycheck each week is a quick and easy way to grow that fund.
Start planning for retirement. It is never too early to start saving for retirement. Once you have a 401k, begin contributing to it and work to increase your contributions annually. The earlier you begin contributing to your retirement fund, the earlier you may be able to retire.
Get out of debt now. The sooner you get out of debt, the sooner you will be able to start saving and investing for your future. Weight will be lifted off your shoulders when part of your income no longer has to go towards your student loans, so begin paying it off ASAP.
Start your career. Upon graduation, you will need to start your job search. Even if it is not something or somewhere you want to be permanently, beginning your career is a crucial part to reaching your financial goals.
Get health insurance. Once you turn 26, you will be removed from your parent’s health insurance. Have a plan ready for when that happens to avoid penalty fees or lapses in coverage.
Find other ways to get income. Maybe you want to start your own side business? There are other ways to earn income outside of your 9-5 job, and you should consider it for extra income.
Don’t pay for things you don’t need. Before you swipe that card, stop and think if you need what’s on the checkout counter. If you aren’t sure of whether you want something, wait it out and see if you still want it in a week or in a month.
Understand your credit score. Understanding your credit score, and what impacts it, is important. Your credit score can determine whether you’re eligible for loans and the interest rate when you borrow money. Also, some employers will check your credit score to make sure you’re not in any financial trouble upon a formal job offer.
Give back to your community. Whether it's $10 or $1,000, you should consider donating a portion of your annual income to a cause or organization that interests you. Learning to be selfless with your money teaches valuable life lessons and installs good habits for your future.
Save up and pay for your first trip. Growing up, many have the opportunity to travel with their parents and friends because they are not financially supporting themselves. After you secure your first job and are on your own, save up for a trip that you fully fund yourself. Everyone needs a break from life and learning to treat yourself is important. And after all this adulting, you deserve it too!
Categories:
Just For Fun
, Smart Spending
, Strategies for Saving
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Kansas City
, Lawrence
, Topeka
, Wichita
