Now that you are an adult, consider exactly what money means to you – as an individual. You may have started learning about money as a kid. As you grow into an adult, it may be helpful to understand that money means something different to everyone. This is why all have unique financial goals. Those goals are directly tied to what we need, what we want, and the values that we hold. For some, it is about success. For others, it is security. Before proceeding, give some thought to what money means to you. Once you have established that, continue reading.
First Things First – Getting and Staying on Track
While utilizing the tips and tricks contained in this guide, it is important that you learn a few key facts. This will help you get on track and stay on that track during your financial adventure:
- It is a known fact that society has quickly transitioned into one that is all about instant gratification. This is especially true of younger generations who have been exposed to tools and resources that permit for instant gratification and have not known otherwise. When it comes to your money, you must avoid the need to spend and simply focus on waiting to making purchases. This will allow you better control over the amount of money that you are capable of saving.
- Determine both your values regarding money and your priorities. Once you determine that which is most important – such as your living arrangements or transportation – cut back on other aspects of spending and only put towards that which you must prioritize or that which appeases to your particular lifestyle.
- Finally, you should focus on your values, your priorities, and your future goals. Avoid trying to live how someone else wants you to live or falling into the trap of living like someone else. Never allow yourself to living above your means to enjoy the same things and activities that others indulge in. The Joneses are probably in debt right now…remember that.
Start with a Budget
The success of your finances will start and end with a budget. This is also referred to by many as a “spending plan”.
In the simplest terms, it allows you to follow your monthly expenses and track where the money you have goes. It involves knowing your income each month, listing financial-based responsibilities, tracking your spending, categorizing that which you spend, and doing basic calculations to make any necessary adjustments.
Saving for Success
It does not matter how young or how old you are – now is the time to save. This is for future spending goals and for emergencies.
It is best to save anywhere from 10% to 20% of your income. It is also important to get into the habit of making your saving goals consistent.
Talk to your local banker in order to set up a savings account that offers interest on that which is placed in it. If you do this, it will not take any time at all to see your overall progress. Do not take out of your savings for anything other than your original goals.
Learn and Adhere to the 50/30/20 Rule
As a young adult, you should learn and adhere to what is called the “50/30/20 Rule”.
In short, this breaks down all of your spending into that which is essential, that which you want, and your savings.
The first 50% should go towards all of your essential bills. The 30% may then go towards that which you want – such as eating out, traveling, and purchasing special items. The final 20% should always be placed into savings.
By practicing this rule, you can rest assured each month that you have met your financial obligations.
Various Strategies for Saving Money
In addition to the tips and tricks previously outlined, there are other strategies that you may use for saving money. These include the following:
- Sign up for direct deposit at your place of employment. Have a certain amount (ideally, 20%) deducted from that check each pay period and placed directly into your savings account. Once there, do not touch it. In doing this, you will not really miss it because you never technically had it or saw it.
- If you get any type of unexpected money – such as a raise or a gift of cash from someone – ALWAYS place the additionally funds into your savings account. Not only will you be able to meet your essentials as you did fine without it, it will grow into an even larger amount of money, over time.
- Check all of the rates of the companies that you use – internet, streaming, cable, car insurance, renters’ insurance, home insurance, etc. – and make certain that you are getting the most for your money. If necessary, contact each of the companies that you use to determine if you qualify for any specials or discounts. You may be surprised and that could end up resulting into more savings!
Somerville Bank is Here for You
If you are a young adult that is ready to take control over your finances, contact one of our highly-trained specialists here at Somerville Bank today. Not only do we offer many checking and saving account options, we have a wide array of other accounts and services that you may be able to successfully implement. We have 112 year of experience assisting young adults with their finances – just like you! We also offer online banking, mobile banking, identity theft services, auto loans, consumer spending, and other types of loans. For more information or to get started with us, you may visit our call one of our many locations. Get instant access to our addresses and the associated phone numbers with the following link: https://somervillebank.net/