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For Young Adults

You are in the first decade of your adulthood, just starting to figure things out in the "real world." Every opportunity is at your fingertips. This life stage is also the time to make choices that will determine much of your financial future. Unfortunately, at this stage in life there is oftentimes a lack of knowledge about the best way to use your money - Pay off debts? Invest? Save for retirement?

Live Like You Don't Have The Money

One of the most common and tempting mistakes that young adults make is wanting too much, too soon. Like most 20-somethings, you probably have high expectations for your start-up lifestyle. You feel the need not only to be successful, career-driven, and financially comfortable, but also want to look the part. You want a spacious home with sophisticated furniture and nice business attire for work. As a young adult, it's important to live within your means. In fact, try to live on less than you earn so that you can start saving sooner and avoid
excessive debt.

Also try to avoid credit card use except in the case of an emergency or for travel.

Know Where Your Money Goes

In order to know how to live within your means, you need to know where your money is going. Keep a record of your spending for a few months. This is often a wake-up call that will prompt you to make essential spending adjustments and develop a budget to control future spending and investments.

Cushion Your Checking

Try to keep at least $500 in your checking account at all times. This makes it much harder to accidentally overdraw your account and incur additional and unnecessary fees, and provides extra cash for unexpected emergencies.

Prioritize Debts

Paying off debts can be overwhelming, and young adults who are just getting started often do not know where to begin. The first step in prioritizing debt is to make a list of current debts and a payment schedule. If you cannot make the minimum required payments, determine which ones need to be paid first. On the other hand, if you are able to pay all of the required payments and have money left over, consider prepayment on one or more of your debts and establish a priority for those as well. You should