Ideally, people would start planning for their financial future the day they get their first allowance from their parents. Unfortunately, most kids do not think of their futures, and shouldn’t have to because childhood is a time to have fun. Adults learn quickly that being grown up isn’t all it is cracked up to be. To focus on finances at a young age is just not something most young people want to think about, it is also more fun to live life instead of planning for potential future emergencies. The truth is, financial planning is a good idea at any age, read on to learn more.
Open an account
Once you have landed a job, open an account of some sort like a checking or savings, it might not be a bad idea to open one of each and start putting money into the savings account every payday. It doesn’t have to be much, $25 per payday is a good start to a savings account. The reason you want to open at least one account is that it makes it easier to keep track of where your hard earned dollars are going each week/month.
Budget
The single most important favor you can do yourself is to sit down and create a budget and stick to it. Write down your base bills, which include rent, utilities and food. Then write down other expenses like car insurance, cell phone, internet and health insurance. Subtract these totaled expenses from your monthly income and what you have left can be used for things like entertainment and vacations. These last two should also go into your budget after your base bills have been paid. It is a good idea to sit down and re-figure your budget at least twice a year to account for rise in costs, pay increases/decreases and additional bills.
The reason you want to sit down and work out a financial game plan is for future stability. You never can predict when you will have a surprise expense or get laid off from your job. There are possible medical emergencies/illness to take into account as well. No one likes to think that they will break their leg and be out of work for a few months, but it can happen. If you have been wise and prepared yourself for these types of events, you will have very little to worry about except getting through it.
The other thing it pays to think about early on is retirement. If you are a twenty-something, then this suggestion may sound ridiculous to you right now, but your future self will be grateful you planned ahead. There are a few ways you can plan for retirement: you can open a retirement account with your bank, you can check into making some investments or you can simply sock away some money in a shoe box and bury it in your backyard. The last one was a joke, but planning for your future is certainly no laughing matter.