If you are like a lot of young adults, you may discover that there’s not much left over from your paycheck once the bills have been paid, and it is easy to neglect best practices and make mistakes.
However, forming smart personal finance habits early has a significant impact on your ability to weather unexpected expenses, build your credit and make large purchases and achieve major life goals.
Recently, Iryss CEO, Jeff McCormack, sat down to share three action items young people should consider to prevent making these mistakes early on. Here’s a quick recap.
As soon as you start earning your own money – even if that’s just mowing lawns or babysitting – it is crucial to create a budget. Determine what your income is, as well as what your expenses are, and ensure that your outflow is not more than your inflow.
- Debt Repayment Strategies
Whether it’s student loan debt, a car payment, or credit card debt, it is common to accumulate some form of debt as you’re coming out of high school or college. It’s critical that you have a strategy that focuses on paying your high interest rate debts off over time. So, find your debt with the highest Annual Percentage Rate (APR) and focus on paying down those balances first!
Start saving as early as you possibly can. A great goal would be to set aside 10% of your income, but it’s important to ensure that you are doing what’s comfortable and realistic for your individual circumstances. Saving 5% of your income is ideally the minimum so that your account builds upon itself faster and faster. The advantages of compound interest are very significant and powerful, so your future self will really thank you for starting early!
Iryss can help you learn more about personal finance.
Join Iryss to receive a check up on your investments, improve your financial literacy, and get your financial plan on the right track