Being young is great in many ways. But you don’t tend to have the wealth and financial sense that older, more experienced people have. And it’s easy to make decisions at this age which will make future wealth difficult to attain.
If you are determined to make some respectable money in your lifetime, it’s important to lay the groundwork now. This can be achieved by simply being aware of future financial plans, even if you don’t think you’ll be enacting them for years or longer. Below you’ll find some financial realities that every adult will want in their life sooner or later. Initiate or prepare for them now, and you’ll be well on your way to a lifetime of financial success.
- Financial Literacy. Financial literacy isn’t like college. It’s not something you have to do all at once before you can put it into practice. What you want to do is make sure you have a habit of learning about how to manage your own money. This may be achieved by reading a personal finance blog or two, and putting their good advice into action. Too many people go through their lives without learning important finance lessons, then learn the things they need all too late. Don’t be like that. Start learning now, a little at a time, and you’ll achieve lifelong financial security.
- Investment. Investing is the primary way that people make serious money for the future. “Serious” money, in this sense, is not about living an ostentatious lifestyle. It’s simply about living a life of relative financial independence, one where you don’t have to constantly worry about how you’ll make ends meet. When you’re old, you’ll likely find it a lot more challenging to pull that one off than you do right now. If you need to start investing for the first time, now is the best possible time to do it. Because of financial realities like compound interest working in the favor of people who start early, investments which you start this year could multiply many times over by the time you need to take that money out.
- A Habit of Saving and Frugality. Saving and frugality isn’t about living a joyless life, even though it often evokes images like that. It’s about living beneath your means, and saving the excess. This may mean that you should move to a city where it’s easy to pay for your food and housing, where there’s also a job that you can do. It may mean prioritizing how you spend your time so that you don’t use all of your money every week. Start now, and you’ll get good at it by the time you really need to have this habit in place.
There are even more financial steps that will come even later in life. Life insurance options from TermLifeInsurance.com will be helpfjul if you have dependents. Saving for aging parents may be something else you have to do one day. But for now, focus on the financial goals that will affect you in the next ten years or so. Planning ahead, you can be sure you’ll have a good financial life ahead of you.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.