A shocking 69 percent of US adults have less than $1,000 in their savings account, and half of these have no savings at all.
What’s more, half of Americans have nothing put away for retirement, suggesting that the average resident’s financial future might be even more precarious than their present.
One of the best ways to make the most of your money, no matter how much you earn, is to start taking care of it early.
Here are ten life-changing financial tips for young adults that will ensure you get off to a great start when it comes to managing your money.
- Work During High School
If you’re still in high school, working a part-time job in the afternoon or at weekends is a great way to earn money. It’ll also set you up for a brighter financial future.
Working in minimum-wage jobs often helps students understand the importance of education and appreciate the value of money.
And, students who through high school are also more likely to have higher incomes in their late teens and early twenties.
- Go to College
College is a big expense, but one of the most sure-fire ways to guarantee yourself a good income is to get a college degree.
If your parents can’t afford to help you out, working in high school and then full-time for a year or two when you leave will help you save towards your goal. Or, if you decide to take out a loan, make sure it’s not more than you can pay back within ten years.
It’s also a good idea to find out more about scholarships, internships and career options to make sure you choose the right path when it comes to college.
- Open a Savings Account
A great way to keep your eye on the prize from a young age is to open a savings account. But, you also have to make a commitment to making regular deposits.
If you’re working, start a direct payment from your checking count into your savings account. Set it up so that a regular payment goes in just after you get paid. If you’re not working, try to make a point of putting some Christmas and birthday money away every year. The more you see your savings grow, the more you’ll want to keep adding to it.
- Track Your Spending
One of the best personal finance tips is to track your spending. Knowing where your money goes every month makes it easier to see where you might be able to cut down and save money.
There are lots of apps which link directly to your accounts to automatically categorize spending into ‘entertainment’, ‘transport’, etc. But, manually entering the information into an app is a better way to keep an eye on your cash and card spending as it happens.
- Set a Budget
For people on a limited budget, planning out how to use your money is key to avoiding overspending. And, one of the most popular ways to budget for young adults is the 50/20/30 rule.
This involves using 50 percent of your income to pay for bills and other essentials. Twenty percent then goes into your savings account or towards debt-repayments. And the remaining 30 percent is for lifestyle choices such as entertainment, shopping and eating out.
- Try Cash-Only
Limiting yourself to the money you have in your wallet is a good financial advice for young adults, especially if you’re an impulse spender.
If you’re following the 50/20/30 rule, leave enough in your checking account to cover any monthly subscriptions then withdraw the rest. You might be surprised how many purchases you reconsider when you have to hand over cold, hard cash.
- Find Cheap Ways to Have Fun
Saving money and paying off debts doesn’t have to mean you can’t enjoy yourself. You just need to find cheaper ways to have fun.
Enjoy nights in with your friends, investigate free events in your area, or volunteer to get free festival passes. And, get outside to enjoy the beauty of nature. Not only is it free, it will also improve your health and boost your mood better than any retail therapy or an expensive night out.
- Be a Smart Shopper
If you’re looking to make a big purchase, compare prices online first. You’ll most likely find it cheaper online, but if not, you’ll know which store to head to for the best deal.
When it comes to grocery shopping, use coupons, bulk-buy when items are on offer, and check packet sizing to see which option works out the cheapest.
Smart shoppers also know that they might not get everything they need in one supermarket. Shop around to find out which store is cheapest overall and then cherry pick from other stores to take advantage of offers.
- Only Use Your Credit Card for Emergencies
Credit card debt has hit a record high in the US, with the average American now owning $6,375.
Some people take on credit card debt as a way to improve their credit rating. But many others use their cards as a way to perpetually defer payment for items they want now.
The best personal finance advice is to not get sucked up into this mentality. Save up for non-essential purchases and only use your credit card for emergencies.
- Don’t Move Out Until You’re Ready
If you have the luxury of being able to stay under your parents’ roof as a way to save up money in your twenties, take advantage of it.
And, when you do feel the urge to become independent and find your own place, make sure you can afford it first. The last thing you need is to take on extra debt to make sure you’re not evicted.
Great Financial Tips for Young Adults
By learning the value of money from a young age, you can get a head start on planning ahead for your future.
And with these financial tips for young adults to guide you, you’ll be well on your way to a healthy savings account and debt-free living before you know it.
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