Let’s face it: the current economy does not support young people in their journey to becoming financially independent. This has been a trending problem over the past few decades, and with the lack of jobs and upward mobility in most places, it can seem nearly impossible to become financially independent and responsible in your twenties. It’s hard to imagine, but having great credit, a stable bank account, and a savings account is actually possible if you plan, and do what you need to do to look forward and toward the future.
The first thing you should do when you want to become financially stable and independent is to start a budget. Even if you do not have a large income, it’s incredibly important to start understanding budgeting, credit, and how much financial decisions will affect your future by how you start thinking about it early. It’s important to also understand the basics, because although this isn’t taught in schools, it may be one of the most important things that you learn. It’s not a bad idea to take a class on this or even ask your parents for a rundown, so that you can get out there and start doing things right when you’re young.
You can decide to either build credit…. Or not. If you’re someone who constantly has a job and money, it may not be a bad idea. But when you’re young, chances are your job isn’t as stable as you think it is. It’s also important to factor in how you think you will fare with having a credit decision when you’re young. If you aren’t completely sure that you will be able to get the most out of your credit, actually pay it on time every single time, and pay it all off if you have to, then you shouldn’t get it. You never know what could happen when it comes to your job, your credit, or your income, so it’s a good idea to wait until something more stable comes along. However, it’s a great idea to build credit gradually, and if you have the chance and trust yourself you can definitely start doing this early.
You need to make sure that you have a savings account as early as possible, way before you ever start thinking about having credit. It’s so important to have a savings account, because not only will it accrue value over time, but it will also ensure that you have more time and money to put into it, just in case you need it for later. You could also start thinking about investing, even if it’s small investments like good quality clothing and savings with this Smartwool coupon. Let’s face it, when you’re young generally have less responsibilities, so if you can put away money when you make it, it’s a great way to start off a hefty savings account before you have any real responsibilities to deal with. It’s also a good idea to have multiple savings accounts, especially if you’ll be saving for a trip. Make sure that the one you focus on the most is your emergency savings account, and if you have some left over, that’s a great place to start when it comes to doing great for yourself.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.