Thinking of taking the next step for your future self? You’re at the right place. Planning your financial future is one of the most important steps toward building long-term security and freedom. Whether you’re just starting out or looking to strengthen your financial foundation, it’s essential to have a clear plan in place. A solid financial strategy can help you avoid common pitfalls, maximize your savings, and achieve your long-term goals.
In this post, we’ll explore five key tips that can help you take control of your finances, from boosting your credit score to setting up savings accounts for your children.
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Investment Accounts
When planning for the future, one of the most vital things you can do is to start thinking about where you want to invest your money, where you want your money to go and what is the most reliable, trustworthy company that you can open an account with? UGMA Accounts are a popular form of investment accounts, especially for parents with kids so that they can give them a financial head start. A lot of parents, young adults and teens don’t think too far ahead in the future when it comes to money but in reality, the future is coming a lot faster than we think so start to prepare now by having investment accounts ready with money going in frequently. Ideally, you can invest pretty frequently such as putting a small chunk every time you get paid and a check hits your bank account! It is a long journey but as soon as you begin little by little each week or each month, you will surely see a difference soon.
HYSA Accounts
HYSA accounts are very popular when it comes to saving long term and gaining interest on the money you’re saving. Rather than have your money sit in an account with your bank, you can put that money into a high-yield savings account. If you open with a bank such as Marcus by Goldman Sachs or So-Fi, you can see a good amount of ROI on your money as soon as you start putting more and more into your savings. High interest in these accounts is great because that means more money for you in the future! Typical banks only give you 1% or less when it comes to interest and making money back so try to go with a bank that can give you 4% or more to really make the most of your hard earned money.
Taking Care of your Credit and Spending
Credit scores and credit cards sound scary but once you get the hang of paying balances on time, spending correctly and more, it will be a breeze! A lot of young adults and even older individuals tend to get their spending out of hand once they make more money or get a new job but that’s when you have to take care of your credit and spend even more. Your credit is so important because this gives you tons of benefits in the future such as lower interest rates for buying a home, easy approval for new cards, better loan terms and more! The better your credit, the easier it will be for you in the long run. With spending, you never want your credit card usage to be too high. Chase says that your credit utilization accounts for 30% of your score so try to be on top of it and be mindful of what you’re purchasing everyday.
Paying Cards on Time and Balances
Paying off your credit card balances and doing it on time is a simple way to care for your future financial self because not paying on time and letting balances carry over can affect your credit score severely. If you make payments late, it can take months to recover and you may even need to get extra help from those who specialize in recovering credit quickly and efficiently. But this can easily be avoided if you do everything in a timely manner. So why is this important? Credit cards are essentially loaned money. Money is lent to you from whichever bank you choose to open with and then that money has to be given back by the time frame. It is typically due within a month or so and if you have high interest or high APR, then you are going to get charged interest on top of what you already owe for your monthly statements.
Not Spending More Than You Earn
Lifestyle inflation can be a huge part of why many people go into debt, begin to go in debt or begin to buy things they don’t necessarily need and want to show off. When you make more money, this doesn’t mean you need to also spend more money. Try to keep your lifestyle and everyday purchases or things you buy and do to a minimum so that you’re not spending more than you earn. Many young adults also do this when they get new jobs or are starting to make a new salary and while it can be fun to book a fancy vacation or get a new purse, think about your future self and the stress you may endure further down the line if you don’t think carefully now. Try to be frugal, spend less and even get coupons or discounts if things aren’t on sale.
Glamour & Guide 