Tips for Being Young and Carefree While Keeping Tabs on Your Finances
Whether you’re moving out of a dorm or your childhood home, you need to be prepared for what’s to come. The first step in preparation is educating yourself. Read on for information about the steps you can take to safeguard you and your financial future.
Build Credit Now, Thank Yourself Later
Your credit score is something that will be with you for life, so make sure it’s as healthy as you are. According to NerdWallet, “You can leverage great scores into a great deal … Bad scores can hammer you into missing out or paying more.” If your credit is lacking, it could cost you thousands when you decide to trade in your junker for a new car. So, take some steps to build your credit up and avoid risky moves that will counteract any progress you make.
An easy way to build your credit is by opening a line of credit through a financial institution. Paying your bills on time, utilizing less than 30 percent of the credit, and keeping the line open for as long as possible will have a significant positive impact on your credit history and score. Don’t apply for every card that comes your way, though, since some of these will have extremely high interest rates and annual fees.
Instead, shop around for the best deal before you commit, and be careful when you’re applying to things. With so many applications online, it’s getting more and more complicated to protect yourself from other people looking to take advantage of you.
Save Yourself from Fraud
Many people have first-hand experience with either a bank or a credit card company admitting that someone was able to retrieve some of their personal information. Sometimes, things can be resolved by changing account login information, but other times, more serious action is required.
Prevent fraud and protect your information by monitoring all of your accounts with online tools like CreditKarma. If a transaction happened that you don’t recall, call your bank or the institution attached to the account. It’s important to take action sooner rather than later.
Identity thieves aren’t the only people you need to look out for — your loved ones and friends are also capable of damaging your credit score. Anytime you agree to co-sign on a lease or loan with someone, you’re taking on the responsibility of making sure the account stays in good standing. As such, know who you’re tying yourself to.
Save for the Future
It’s safe to say that you need to have something in savings in case something was to happen with a roommate. You should also be putting money aside for yourself in the event of an emergency or for future use. Choose a savings account that fits you and your needs, and start stashing as soon as possible. Life happens — maybe your hand gets hurt at work and you can’t do your job for six weeks, maybe longer. You need to know that you have what it’ll take to cover expenses for the time you’re benched. Save now and relax later.
According to AmericaSaves, “setting up automatic savings is the easiest and most effective way to save.” By automating your savings and bills, you take the work out of calculating the amount each month. With a consistent amount of your income going straight to savings, you won’t have to worry about spending it frivolously.
Also, you need to save money for future things like down payments on cars and homes. Start small, and save what you can for a few months. From there, take another look at your budget and see if there are any other places where you could save a few more dollars. Your coffee run every morning doesn’t seem like much, but it adds up. If you can’t give up part of your routine, Redfin suggests taking on more work or starting a side gig to pad your savings for a down payment. The drawn-out process of saving will go by quicker, and you’ll have a motivator through each hour of overtime — a better future.
To ensure that your future is financially secure, it’s important to start planning as soon as possible. Learn to cut out the unnecessary things in your life, and stash money aside for a rainy day whenever possible. Before long, you’ll have enough saved up to protect you from whatever curve ball life decides to throw your way.
WRITTEN BY CHRISTOPHER HAYMON AT www.adultingdigest.com
Image courtesy of Pixabay