As a young adult in the working world for the first time, your first paycheck from your first job is the start of something new. Many young people learn the basics about money as they grow up, whether it’s through earning money through a lemonade stand or in the form of an allowance for doing chores. As you get older and tackle more adult financial tasks, such as paying bills and creating a basic budget, it’s important to continue to learn and hone your financial skills and literacy.
In 2019, we live in a more digitalized world, and we have hundreds of apps and banking technology at our fingertips to help us with money and basic financial tasks, thus making it much easier to develop a strong sense of financial literacy than it was 30 years ago. But aside from tech, there are all kinds of skills young adults need to learn in order to maintain future financial security.
- Set up an auto-transfer to your savings account. This task is one of the most basic things you can do to maintain good financial health, but also one of the most important. Once you’ve figured out how much you can budget for savings every month, set up automatic transfers between your accounts so the money will be transferred without you having to think about it.
- Work toward establishing your credit. As you ease further into adulthood, having a strong credit score is important with regards to renting a home and applying for loans. You can start building your credit by applying for a low-interest credit card and making small purchases on it, and ensuring you pay off your balance every month. You can also establish good credit by making sure your bills are regularly paid on time.
- Check out mobile apps and technology. Developing a sound budget is one of the most important skills to learn as you take on your first job. You’re likely starting from square one, so begin by creating a budget based on your current expenses, your take-home pay, and your savings goals. Apps like Mint, which sends you reminders for your bills and lets you see your credit score in real time, or Wally, which helps you track your expenses by letting you take photos of your receipts, are effective especially with young adults who are more tech-savvy
- Create an emergency fund. You never know if or when you’ll hit some kind of financial dire straits, like losing a job or getting an injury or illness that requires you to take time off of work. The general rule of thumb is to have three to six months worth of pay saved in the case of such an emergency. It’s worth noting the importance of keeping this savings account separate from your regular savings account so the two aren’t confused.