When you become an adult and move away from the family homestead the concept of looking after your own finances can be daunting. Sound familiar? Here is a selection of the best financial tips for young adults.
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Maximize Your Student Loans
The cost of education is rising with each passing year and it’s becoming more and more difficult for parents to send their kids to school without access to private student loans. If you’ve just graduated and you’re facing down the road of repayments, why not consider the option of refinancing the loan with a private lender? You’ll enjoy significantly lower monthly expenses as the interest rate could be much lower than what you’re used to paying.
This is probably the hardest lesson in this list to learn but self-control is your best friend when it comes to gaining financial control. Resisting the urge to pick up carryout when you have enough cash to burn through after getting paid is brilliant. Not upgrading your gaming technology when the latest console comes out is even better. There are plenty of reasons why this works – not just financial ones either – for example, when new consoles launch there are inevitably going to be teething issues, either with the games made for them, or, as we have learnt from the PS5 launch, with distribution. So, save the $500+ dollars and wait a year. You could get it cheaper, there will be more games available, and it will be easier to get hold of.
Cut Back Where Possible
Are you paying for Netflix and another on demand subscription service? It’s time to stop the direct debit for one. Do you pay more than you need to for groceries? Cut back by buying the bargains in bulk and by checking all stores for price changes. Are you spending way too much on your energy bill? Maybe it’s time to change provider or upgrade the appliances and lighting fixtures in your home so they are more environmentally friendly. There is always room for making cuts so take some time to identify the areas in your budget where you could save on your monthly expenses.
Start an Emergency Fund
Our advice here is to set up a digital pot that you can’t access and let it grow over time. That way, when you need a big operation and $20,000 to pay for it due to an insurance mistake (because they always happen at the worst times) you already have the money waiting to be spent.
Start Saving for Retirement
Probably a reflection of the last point but since there isn’t a state mandated retirement scheme everywhere you might want to start putting some of that paycheck into a retirement scheme. Yes – your employer will probably insist you use theirs or they won’t match X amount but opting into that should be separate to having your own private one. Moreover, the interest on private retirement funds tends to be better than on company-sponsored ones so that’s something to consider too.