So many graduations, so much advice dispensed! It all sounds so inspiring and logical to accomplish, but where do you start?
Having a plan – a roadmap – helps you get where you want to go. And, accumulating the money to get you there is a big part of it. It can be harder than you expect to build wealth…sometimes “life” just gets in the way. But you can do this and not skimp on the fun! Here’s how:
- Live below your means
- Pay your bills on time
Being able to master these two financial habits helps you keep debt to a minimum and also maintain a good credit score, thereby setting yourself up to pay less when you do borrow. The less you pay in fees and interest, the more money that goes to your nest egg.
Next, grads beginning a career can work to check off these 14 “Financial To-Dos” in their 20s:
- Hold jobs that build career skills – because your dream job may come later.
- Maintain both checking and savings accounts – because one means spending, the other saving and the two don’t mix.
- Reconcile bank statements regularly – to watch where your money is going and to catch identity theft early.
- Make and FOLLOW a budget – to see your month-to-month spending patterns and where to cut expenses.
- Open a Roth IRA – saving through this Individual Retirement Account helps you take advantage of the power of compounding.
- Figure interest and monthly payments for student loans – the sooner you pay these off, the quicker you can build wealth.
- Build up an emergency savings fund – because unexpected expenses do happen… when you don’t expect them.
- Build your resume and a network (such as LinkedIn) – who you know can help advance your career.
- Open an investment account – this is not the same as a bank account, but a long-term path to build a nest egg.
- Have a goal of buying at least one ASSET – because you build wealth by investing in stocks, land, rental property, a home to live in, or other assets that can appreciate in value.
- Check your credit report annually – especially to monitor for bogus charges or discover identity theft.
- File income taxes – this is an annual task, and you may get a refund (to invest, of course).
- Create a financial timeline – to visualize your goals, mark when you might reach them. If you don’t know where you’re going, it’s hard to get there.
- Make a NET WORTH statement – a summary of what you own and what you owe, there’s nothing like keeping a tally to see where you stand, right?
As you begin to accumulate assets and build a nest egg, you may want to start developing your financial team…and find a money mentor, too. More on that later, at MoneyGodmotherBlog.com!