Oh, the things I would change if I could be 18 years old all over again! The first thing that comes to mind is that I would’ve not worn colored jeans and flannel, but financially speaking, I would’ve done things a bit differently.
Over the years, I have made some good decisions, but I have also made several bad ones. This list is geared for people in their late teen’s or early 20’s. It will not apply to folks older than the 30’s. Here are 7 financial tips for young adults.
Choose A Career That Is In High Demand And That You “Love”
I put love into quotations because realistically its difficult to find a job that you will love AND that pays well. That’s not to say there aren’t jobs that you will love, but is that job in high demand? Will you have a job when you graduate? Is that job at risk of being obsolete in 10 years? My wife and I are both in the healthcare field which is currently in high demand and has one of the highest growth potentials of any other field.
Assess Whether College Is Right For You
If you are an entrepreneur, maybe college may not be a good investment of your time and money. If you have good ideas, you may be able to provide something of value and build it without going to college (think Mark Zuckerberg, Bill Gates, Michael Dell, etc.).
Turn off the television and pick up a book. I failed at this in my teens and through my 20’s. I never really read anything and preferred MTV over CNN. Over the last 3-4 years, I’ve made a stronger attempt at reading more and learning more about things that interest me.
Save Aggressively For Retirement
When I had a part-time job in college, I put money away in a Roth IRA. When I got my first full-time job out of college, I invested money in every retirement vehicle to the maximum (401ks & Roth IRAs). Investing early is one of the most important financial decisions you will make. This tip alone has out performed any other tip on our road to the 1 percent.
Invest your money aggressively, then don’t follow the stock market. If you do, you will feel down when the market is down, and you will feel a false sense of security when the market is high. To avoid this, balance your accounts annually, but don’t track the market day-to-day. From a retirement standpoint, how the market looks today is nothing what it will look like 45 years from now when you’re 65 years old.
Live Within Your Means
Retirement, rent, food, basic clothes, transportation, and health insurance should be a priority. If you have money left over, then you can think about a cell phone, internet, cable, gym membership, etc.
Work Hard, Play Hard
We are all busy and can get caught up with all the responsibilities of life. This is a reminder to enjoy the fruits of your labor. If you follow the tips above, you should take some time to relax. Take a mini vacation. Spend some time with family. Invite some friends over for dinner. If you don’t, then everything you’re doing is pretty meaningless.
Did I miss anything? Do you have any additional advice for our younger readers?