At most universities, your education won’t include a credit in personal finance, and if it does…it definitely won’t be free. Even after graduation, some of the brightest students still have trouble mastering the tricks of the trade in order to balance or even improve one’s financial standing. That’s where we come in. The following four tips will make it easier for you to take control of your finances now and for years to come. No matter where you begin, you’ll be glad you did.
- Don’t Always Go All Out
Now that you have a steady income, it might be tempting to spend it like you wished you could in college. It’s certainly fun to go out and blow $20 on a single cocktail or $150 on a trendy new bag, but that’s not doing much to improve your financial situation. It’s up to you, now that you’re in control of your money, to decide what’s worth spending extra on. Don’t let your FOMO take over your spending habits.
A once-in-a-lifetime trip or a birthday party for a BFF might make the cut, but those weekly girls’ nights might not. Of course, there are ways to have fun on the cheap, especially since you’re still young. Simply use your discretion when whipping out your wallet, and you’ll see a return in your bank account instantly.
- Set A Goal
You know you need to improve your financial standing, but how? Without a concrete goal in mind, you’ll have a hard time making any sort of improvement. That’s why it’s vital for millennials to come up with a single, tangible financial goal to chase.
One goal might seem like underachieving, but it’s important to start small. That way, you can focus your time and energy on making it a reality and proving to yourself that you can. After you’re successful once, nothing will stop you from doing it again and again and again.
- Stay In The Black With Smart Investing
As you set out on your own, you do so with a blank slate. At this time, it’s incredibly important to set up a solid base for your future financial state. You should do all you can, therefore, to keep your bank account floating above the bottom line. Spending more than you have is never a good habit to get into, and neither is making a super-risky investment. Instead, always attempt to save more than you spend and invest wisely in steadily lucrative industries.
Another great way to help you build a strong financial background as you enter the adult world is with a credit card. Yes, they can be scary, but knowing how to use them to your advantage can reap huge rewards when it comes to getting a mortgage or loan later down the road. You’ll first want to check your credit score. Sites like CreditKarma.com and Credit.com offer these for free. To get you started, you’ll want to look for a card with low-interest rates (the amount that you pay back to the credit card company, on top of what you spent) and no annual fees.
For those of you with a good credit score, the Chase Freedom or Discover It cards are great starting points. They both offer you 1% cashback on all purchases and 5% on certain categories. If you have little or no credit, the Capital One Secured MasterCard is perfect. Be sensible with your spending, pay off your full balance every month and watch your credit score steadily improve.
- Live in the Present
Perhaps you’re staring down an extra-large credit card bill or kicking yourself for turning down what turned out to be a lucrative job opportunity. It’s easy to relive these mistakes over and over in your mind. However, doing so will do nothing to improve your financial situation. In your young-adult years, it’s imperative you give yourself a break. Just remember to live in the present rather than dwelling on what’s already happened, and use this to make positive improvements, like keeping a consistently empty credit card statement. It’ll be so much less stressful than worrying every month if you’ll be able to pay off your bill.
You’re just learning to navigate life as an adult in all senses – socially, professionally, financially, etc. – you’re not going to be perfect. Having regrets won’t get you anywhere, either, so give yourself a break, take a deep breath and start from square one. Cut down on frivolous spending, set a financial goal and strengthen your account. With the right mindset, you’ll have this whole thing figured out in no time whatsoever. It’s time to get started.
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