As a teen or young adult, it can be difficult to know the importance of managing your finances. With growing concerns of where you want to go to college, what profession you want to pursue, or even where you are going to live; how to manage money may be the last thing on your mind. That’s why I want to talk about why it’s never too early to learn healthy money habits.
Control spending habits early
Before you even try to tackle finances and how to manage them, take a hard look at your spending habits. When I was 18, spending money was like drinking water. I was living at home, paying almost no bills. The money I earned from working at a movie theater was spent on whatever new game, cd, or casino trip I could organize. I had no control or restrictions on how I spent my money. This of course ended up being a very serious problem when I moved out, got an auto loan, had a cell phone bill, along with other financial responsibilities. I quickly found myself living paycheck to paycheck and eating a lot of sandwiches. Sure, lots of people will say, “well, that’s part of the life experience we all go through to learn about money.” But does it have to be? Do we have to go through financial hardships as part of learning to manage money and our finances? Learning young and setting good spending and savings habits early, is the best way to ensure financial freedom and eliminate unneeded stress.
Start a savings account today
When you are younger, starting a savings account has to be one of the most boring things to think about doing with your money. You are finally old enough to buy what you want, when you want, and now we’re saying the most important thing to do is to learn to save. Yeah, I know, it sounds lame. But unexpected things do happen, and usually at the worst times imaginable. Saving accounts can be the difference between getting by and making tough decisions like choosing between paying bills or getting food. One thing 2020 taught all of us, is that we can never be too prepared. Save what you can when you can. Having healthy money habits can be achieved even if you are putting away $5 per paycheck into a savings.
Don’t be afraid of credit
One of the biggest misconceptions I think that was passed down to my generation is how credit cards are bad and racking up too much credit can bury you in debt. To a degree this is very true, if not properly maintained and balanced. The truth is, moderation and credit can be amazing for one’s financial well-being. Credit cards not only give a huge boost to your credit score if paid on-time and kept below 30% of the balance, but many offer amazing bonus and cash-back offers if utilized properly.
Building and maintaining a healthy credit score opens the door to so many great opportunities, not to mention you also save money in the long run. Just like savings, credit was something far from my worry radar as a young adult. For many years, I was carrying a low 600 credit score (if I was lucky). This lower score gave me higher interest rates on my auto loan and credit cards. It also required down payments on many purchases, like cell phones. All these things required more money I didn’t have. The good news with credit is, it’s never too late to learn about credit and how to improve or build your score. Astera CU has amazing financial counselors on staff that are ready to sit down and give you a dedicated plan on credit scores. After speaking with one myself, I was able to boost my credit score almost 100 points in just a few months.
We’re here to help
At Astera, we want to help our members no matter which financial step or journey they are on. Our yourMONEY accounts were created specifically with young adults in mind who want to start healthy money habits. Whether it’s to help prepare them for college, or post-college, it’s the perfect account to get anyone started. Our EmpowerME program was also created to assist anyone 18 and older to get their financial life on track. Whether just starting out, or looking for help, our financial coaches can help turn your life around, and leave you with the tools meant for financial independence. Call us today at 800.323.0048 to learn more about signing up for our free EmpowerME program. Click here to learn more about our young adult yourMONEY accounts.
Astera Credit Union