As a young adult, you’re probably still navigating the ropes of living life on your own terms. It’s a complex blend of wanting to travel, climb the corporate ladder and start a family. As you traverse through the various experiences in the beginning years of adulthood, it’s important for you to make some intentional decisions regarding your finances. As you set plans for the future, make sure you do so with your financial future in mind. Have inner conversations surrounding the following tips, and make sound decisions moving forward.
1. Financial Goals (Specific Number)
It’s always really helpful to have set goals. Defined goals will help you gain a sense of direction. If you’re just going aimlessly through life, you won’t be able to achieve much. Make a concerted effort to find a specific number, and dedicate yourself to earning that amount in the future. If you’d like to earn a million dollars or have a million dollars in the bank by a certain time, set up a plan to achieve that goal. It might seem far-fetched at first. However, when you break it down into smaller goals, you’ll see that it’s something that you can definitely achieve.
2. Financial Vehicles
Take a look at the financial vehicles that you’ll use in order to achieve your financial goal. Understand that having a typical full-time job is only one piece of the puzzle. When you work a full-time job, you are trading hours for dollars. There are only so many hours you can work in one day. Your time and energy are limited resources. So, it’s wise to set up different vehicles and strategies in order to reach your financial goals. Some of these vehicles include passive income sources and multiple streams of income. Examples of these income streams involved rental income as a landlord, stock market returns and digital product sales. With these income streams, you will need to put in a certain amount of work in the beginning. However, once you set up the systems, they’ll make money while you sleep. You may need to do a little bit of maintenance every now and then. However, it’s something that will continue to make you money years down the line.
3. Financial Security and Protection
Take a closer look at ways that you can financially protect yourself. If you’re currently renting your home, make sure that you have renter’s insurance. Take a closer look at important assets like life insurance, health insurance and dental insurance. While these expenses might seem optional at this point in your life, you have to do your due diligence to take care of yourself. You never know what might happen in the future. Become familiar with different concepts like term deposits , savings accounts and financial security.
4. Financial Freedom
Many young adults are riddled with student loan debt. Because they went to school to become a lawyer, doctor or engineer, they ended up having to spend a lot of money to get the degree. Even though your student loan balance looks like it’s never going to go away, it’s best to be intentional about getting rid of the debt one step at a time. Once you are financially free, that money can go towards other investments and passion projects you might have. Don’t be afraid to look at your balance. Whether it’s a mortgage, student loan payment or a credit card statement, always be intentional about creating a plan to pay off your debt. Once you create that plan, stick to it. You might even want to consider getting a second job to help you pay down the debt that you owe.
If you get really focused, you can pay down the debt in no time. Plus, many collectors and lenders will work with you. Some might allow you to pay a fraction of the total cost. Yes, this will take a little bit of negotiation and persuasion. However, it’s worth the shot.