Let's talk money: Finance 101

Before you go, we thought you'd like these...
Before you go close icon

By Jessica Remitz via Advice from a Twenty Something

After making the leap to self-employment this spring, I knew I'd need to be on my A-game when it came to finances. I like to think that I'm pretty savvy when it comes to saving my money and knowing a tiny bit about investing, but full time contract work pretty much forced me to get it together and become an expert-fast.

While questions about employee identification numbers and personal business expenses whirled around my head, I began to realize how important it is for 20-something women to have a clear grasp of where their hard earned money goes, how to make more of it and how to save it for a rainy day. I know I've got a long way to go to having it all figured out, but I have learned a few things along the way that I'd love to share. Whether you're full-time, part-time, freelance or still looking, here are some finance 101 tips:

TALK TO A FINANCIAL ADVISOR
I'm using this term in its broadest sense (my business gurus include my dad and grandpa) but I'm constantly grateful for another person's advice when it comes to financial planning. My dad helped me set up my 401k when I was working full-time and was there for me when I panicked over what to do with it after I left my job. My grandpa has been doing my taxes for years (bless his heart) and in addition to showing me how to properly fill out a W2 as an independent contractor, he helped me figure out a plan for my freelance expenses. No matter what your situation is, find someone you trust, talk to them about your finances and ask them all those seemingly silly questions you won't ask anyone else-you'll be so glad to get the answers!

SPEND WISELYGetty
I would be insane to suggest you never go lying if I said I never treated myself to a new pair of shoes, but I do like to think over my purchases before I make them. Every month after I've paid my rent, covered my bills and tucked a little cash away, I take a look at what's left and try to make the most of it. I won't remember every $5 latte I've bought in the last month, but I most certainly will remember a long dinner with friends or new blouse that's perfect for work and play.

LOOK AT YOUR NET MONTHLY INCOME
Getty
If you do any kind of contract, freelance or part-time, it's an absolute must to factor in what you'll likely pay in taxes when you cash those paychecks. As great as it is to receive all of your money upfront, writing the IRS a fat, unplanned check come April can be down right traumatic. My advice? Talk to your financial advisor about what percent you think you'll owe for the year and take it off the top of every check you receive before you spend it. Squirrel it away in a savings account and keep your hands off it till your taxes are filed.

TRACK YOUR EXPENSES
Getty Even if you work full time, you may have some professional expenses you can consider writing off every year, and if you're freelance, part-time or contract? Get back on the horn with that financial advisor and go through all of your day-to-day expenses. Anything business related can count towards your expenses, including a portion of your rent or mortgage, phone bill and gas or car payments. Just be sure to keep a detailed record of your expenses and hang on to your receipts, you'll need them when filing your taxes.

PLAN FOR THE FUTURE
Getty
You don't have to have hundreds of dollars on hand to invest; as little as $25 every month can get you started. Take a look at your current finances with a budgeting site like Mint, then set aside a little bit for personal investments outside of your 401k or retirement plan. I use Sharebuilder to buy stock in companies I care about (like Gap and Estee Lauder) and Vanguard for mutual funds, and there are plenty of other sites out there designed specifically for personal investing. Find one that fits your needs-look for one with options for monthly withdrawals, low transaction fees and easy access to your online portfolio-and get started!

More from Advice from a Twenty Something:
Let's talk time management
How to be productive when working from home
5 reasons to start a business in college

Read Full Story

From Our Partners