Money Management Tips for Young People

If you have recently graduated and you’re working at your first job, you’re probably experiencing an influx of income like never before. Now that you’re starting to earn money and plan to live on your own, you’re learning how important budgeting and saving money can be. If you want to set some financial goals for the future, here are some great tips from Carolina Money Minders to manage your money while you’re young.

Save for retirement

I’m sure you feel like retirement is a long ways away and you’ll never be old enough to use all that money. But retirement happens faster than you might think. If you’re able to put money into a Roth IRA account, sometimes your company will match a percentage of the amount that you put in. This increases the money going into a retirement account. Prepare yourself for the future and you’ll never have to fear for what’s ahead.

Start a rainy day fund

How much money do you have in your savings account? If you’re like most Millennials, you don’t have much. What will you do if you have an emergency and need to access some extra funds? Storing up extra money in your savings is a smart way to curb those emergencies without dipping into a credit account. Plus, an emergency is the very reason that we put money aside. It’s much easier to pull from your rainy day fund than to beg your parents to dig you out.

Get insurance

Many young people feel a little wary towards insurance companies. They feel healthy and invincible. They don’t see the value in paying for health or renter’s insurance.

While it can be tough to pay your health insurance premium each month, it would be much harder to pay for an emergency room visit out of pocket. With Obama Care - everyone is required to have health insurance or face a hefty fine come tax time. So if your Company does not offer health insurance, you are not covered by a parent’s plan, make sure you register on the Obama Care Marketplace.

The same goes for renter’s insurance--you might feel like your place will never get broken into or suffer a calamity, but you just never know. It’s smarter to protect your assets with insurance because those “just in case,” scenarios could happen anytime.

Learn about taxes

Before your tax season is over, make sure to check out how much tax is being taken out of your paychecks. It would also be wise to learn about the tax process for your individual tax bracket/filing status before filing your taxes. When you are prepared, your tax filing process goes smoother and you can sometimes find tax cuts that fit your situation.

Know what needs to be paid and when

Now that you have to pay all of your bills on your own, setting up automatic payments is an easy way to pay bills on time. Make sure you are managing your bank account well so that there is money in your account when your bills come out. Scheduling payments will help you stay on top of your bills. Set alerts that notify you via email and/or text when you reach certain balance thresholds (i.e. only $100 left in your checking account) or when large payments are deducted - this will alert you to possible fraud or a payment you forgot to account for - think car insurance!

Learn some self-control

Do you like to spend or save? Learning saving habits can help you put money aside to be used at a later time or to help purchase large items like a new car, a down payment on a house or other things that you might need.

When you are young, you are learning money management habits that will stay with you for a lifetime. Whether you will struggle or succeed with respect to getting ahead is up to you in the way that you manage your finances. If you want to learn more tips for managing your money, contact Carolina Money Minders for help today.