By John Stylianou, Accountant
Young people generally feel pretty good about life, but once in a while, they may wonder if they’re making the right financial moves. Here are some simple (yet effective) financial strategies for people in their early twenties.
Pay yourself first. Every time you get paid, put something aside in a savings or investment account. As a general rule, save 10% of your income. Even smaller amounts add up over time.
Watch your plastic. Credit cards are an expensive form of debt, and it’s easy to lose control of them. Try to pay your entire credit balance every month, even if it’s a stretch. If you’ve been carrying a balance, buy nothing more on credit until the balance is zero.
Keep a clean credit record. If you plan to own a home, buy a car, or start a business, you’re going to need squeaky-clean credit. Keep all of your financial obligations current, and never make a financial commitment that you can’t keep. If you fall behind on any obligation, talk to the creditor immediately to make alternative arrangements.
Watch your expenses. At this point in your career, you may not receive large or frequent pay raises. But you can achieve the same effect by cutting expenses. Shop before you buy. Very similar — and sometimes identical products — are sold at widely varying prices. Wise shopping can be the equivalent of having a good-paying second job.