Learning how to properly manage finances can be an overwhelming process for anyone, but especially for young adults earning a salary for the first time. Common questions can include:
The answers vary from person to person, but there are a few skills the MAI Capital team believes everyone should learn as early as possible.
Research several reputable banks and screen the options for fees, such as maintenance or overdraft, to find out which best fits your financial situation.
Manage your income and expenses by using the 50-30-20 method.
50% – Living expenses & essentials: rent, groceries, utilities, and other day-to-day needs.
30% – Flex spending: dining, travel, and other fun activities.
20% – Financial goals: savings, debt, buying a home, and more.
Use tools like an excel spreadsheet to track how and where you are spending money currently and how you might adjust to avoid overspending.
Define your goals based on a timeline:
1 year or less: short-term emergency fund
1-5 years: mid-term
5+ years: long-term
This way, you can allocate resources according to your needs, like a downpayment on a home, purchasing a vehicle, or a last-minute emergency that arises. By planning ahead, you may be able to avoid difficult financial situations that negatively impact your future.
When you start your first job, contributing to your retirement may seem overwhelming. But opting into a 401K or a Roth 401K early can set you up for great success down the road. Educate yourself on the options available to you, like an employer match, and consider meeting with a financial planner to make the best decision for your future.
Building a credit history is important, but use these tools responsibly. Focus on paying off existing debt as soon as possible to avoid interest rates and fees.
File on time and correctly. There are many tools available to file your taxes at a minimal cost, especially while your finances are less complicated. If and when your finances become more complex, review your options with a professional who can guide you through the process.
You work hard for the money you earn, so protect your assets. Research coverage and premiums to protect against unexpected losses or damages, such as accidents, illness, or lawsuits.
At the beginning stages of your career when you first start earning money, it can be difficult to think toward the future. But it is important that you do so. Balancing enjoying life while also planning for anything unexpected is an important skill to learn. Educate yourself in these 7 areas to get a head start on your financial future.
If you have questions about any of these topics, please reach out to our team at firstname.lastname@example.org so a team member can help.
If you have any questions related to this topic or your portfolio in general, please do not hesitate to reach out to your wealth advisor at any time.
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