9 things 20-somethings need to do to secure their finances
When you're in your 20s, and trying to balance school with working and having a social life, you probably don't have much time to focus on your finances. Before you're ready to get a grip on your money, you might make a costly mistake or two along the way.
Becoming financially savvy isn't rocket science, and all that most young millennials need is a crash course in the basics. If you're struggling to get the basics down, or simply don't have the time to figure out where to start, take a look at this list of 10 must-do moves to secure your financial future.
#1. Track Your Spending
Writing down everything you spend might seem tedious at first, but it's a good habit to get into. If you're always running out of money, tracking what you've spent can tell you what's draining your cash the most. Hint: It might be your credit card.
Once you see where your money leaks are, it becomes a lot easier to take control of your spending and savings.
There are tons of apps out there that are geared toward tech-loving 20-somethings, and using them can make managing your finances a breeze. If you need help with tracking your spending, for example, Mint does the hard work for you.
#2. Become a Budgeting Pro
A budget is one of the most important financial tools that every young adult should know how to use. A budget is a plan for what you're going to do with your money each month, and making one isn't as hard as you think.
If you've been keeping tabs on your spending, you're already halfway there. The next step is comparing what you've got going out for bills and other expenses to what you've got coming in.
As long as you have more income than expenses each month you're already ahead of the game. If you're constantly ending up in the red, that's a sign you need to cut back on what you're spending. Sometimes, it can be as simple as skipping that extra latte and opting for a free activity over a day at the mall. Here are some simple budgeting tricks to get you started.
#3. Choose the Right Checking Account
If you've taken out loans to finance your first couple years of college, you don't want to wait until graduation to add up the damage. Take a look at what you've borrowed so far and the interest rate. If you can pay a little each month toward the balance while you're still in school, you'll have that much less debt to tackle once you've finished your degree.
#8. Brush Up on Tax Basics
If you're working and your parents aren't supporting you, you'll be responsible for filing your own taxes. Tax filing usually isn't too complicated for most young adults, but you'll want to make sure you're scoring key tax breaks — like the saver's credit — if you're contributing to an IRA, or the American Opportunity Credit if you're paying any of your own tuition costs out of pocket.
Learning a bit about taxes will help you see opportunities to earn credits and make you familiar of ways your taxes will change as you age and obtain a home, start a family and enter new income brackets.
#9. Have a Plan
The financial habits you develop at this age can set the tone for how you manage your money in your 30s and beyond. Setting goals — whether it's for paying down your student loan debt, building up a down payment for your first home or saving for retirement — gives you a clear roadmap for getting where you want to go.
Look at your debt, income and long-term goals to help create a savings plan that can make them a reality.
Click through to see easy ways to put money in your pocket this year: