Twenty Somethings and the Dire Need for Better Budgeting

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Millenials, Its Time to Invest in Your Future

• Invest-Smart
• January 2014

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Preparing for Your Future

• If you recently finished school and have landed
  your first serious job, you may think its a
  little early to start worrying about saving and
  investing your money. That couldnt be farther
  from the truth. No matter how you look at it,
  the earlier you start saving, the more youll
  have later. Plus, figuring out how to manage
  your income now will make things far easier down
  the road when you are buying a home or planning
  for retirement. The cultivation of good financial
  habits brings life-long rewards. These initial
  budgeting tips will help you find your financial
  footing and begin investing in your future.

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Cover Your Bases

• As you begin thinking about long-term goals, make
  sure you have a plan of action in place that will
  address your immediate situation. That should
  include paying off any student loans you may
  have. With an interest rate of 5-6 or more, its
  important to pay off student loans as soon as
  possibleespecially since federal student loans
  are the most difficult type to shake. Current law
  makes it extremely difficult to have student loan
  debt discharged during bankruptcy. Of course, no
  one should be planning for bankruptcy, but one
  key to a financially secure future is to address
  debt before life gets even more complicated. You
  dont want old debt looming over your head when
  youre planning a family or looking for a home.
• In addition to paying off your loan debt, its
  important to put away emergency savings. At some
  point in the near future, you will have
  unexpected expenses. When you have to pay for
  major car repairs or an unexpected surgery, you
  will thank yourself for setting the money aside
  and sparing yourself from debt.

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Determine Your Long-Term Goals

• Even if you dont have your whole life figured
  out, chances are you have a feel for your major
  priorities and interests. If you plan to travel
  the world while you are still young, your saving
  habits will look a lot different than if your
  goal is to retire early. Articulating your goals
  will help you determine how much to save every
  month. Some advise young people to set aside as
  much as one third of their monthly income, while
  others say to save at least 10. Whatever amount
  you decide on, make sure to set aside money for
  each of your important goals (from retiring
  early, to owning a home, to traveling the world)
  on a monthly basis so none of your goals get
  neglected.

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Looking Ahead

• The benefit of saving right away is that you
  wont get used to a lifestyle that you later
  discover is too expensive. Its much easier to
  start lean and work your way up than it is to
  scale back on the things you used to enjoy.