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Mentorship December 2, 2016
When we’re young, we’re at the peak of our health, we’re relatively independent but still have support from family and most importantly, we have the rest of our lives to figure out what we want to do.
But for some, that’s the problem.
It’s not like we want to drift around for the rest of our young adult lives, not really sure about what we need to do to achieve our goals or what those goals are to begin with. The trepidation turns into worry when we finally realize we need realistic goals in order to have some structure in our futures. That means career plans and taking steps towards financial responsibility.
What does that even mean? If we’re working minimum wage jobs and have thousands of dollars of student loan debt, how are we even supposed to think about saving up for this mysterious future?
That’s where investing comes in. This isn’t about putting a huge chunk of your income into nebulous stocks you don’t understand. What’s more important, especially at this stage of life, is setting a suitable foundation now for a more financially independent and carefree life later. So there are definitely steps you can take in order to invest in your future.
READ MORE: A Basic Guide to Investing
It’s common knowledge that getting a college education is the best way to improve your quality of living. Sadly, there is no magic cure-call for getting rid of the debt currently weighing down your credit score and hounding you every month for repayment. The best advice is to take on as fewer loans as possible and educate yourself about how to pay for school.
That means researching potential scholarships and getting in touch with your school right away to learn about your options before signing up for more loans. Yes, college is expensive and classes are stressful, but that doesn’t mean you can’t work while earning your degree to help alleviate some of the costs. You won’t be alone; according to CNBC around 70 percent of college students work while attending school and around 25 percent of students go to school and work full-time simultaneously.
READ MORE: Smart Investments You’ll Thank Yourselves For
Maybe a 40-hour work week is not possible with several classes and school clubs, but even a few hours on the weekend can help with some of the added costs. And if that job helps keep off another loan, all the better.
Some people are blessed with magical bodies that are impervious to junk food and late-night binges. However, most people can’t handle sustained unhealthy eating without suffering the consequences, which include weight gain. There are steps young people can take early in life to lesson the burden on our bodies and our wallets in the future. Remember that health-related costs are also the highest bills that many people pay for as they get older.
That doesn’t mean you have to be a size zero and live at the gym. You don’t even need to pay for a gym membership. You just need to adopt a more active lifestyle and learn to make your own meals. It might also lower your grocery costs in the long-run if you eat out less and buy healthy ingredients to prepare at home. Being healthy isn’t a priority for us right now, but in the future that could save us a lot of money by making this one smart investment.
READ MORE: 7 Reasons You Should Cook at Home Instead of Eating Out
This is one of the biggest problems young people have when trying to save money. How are we supposed to save money when everything we need costs money? The best way to save money is to get into the habit of always paying yourself first. This means consistently taking a small portion of every paycheck out and putting it into a savings account where you can’t be tempted to spend it.
The rule of thumb is to typically save 10 percent of every paycheck before taxes are deducted. If you don’t have an emergency fund of around three to six months of your income, you should start by paying into an emergency fund. If you have something like that set up already, you should still keep this habit and pay into another savings account.
It’s best to sign up for a savings account with a high interest rate so you’ll get more money back on your initial amount. This Nerd Wallet article has a list of banks with the highest interest rates for savings accounts which will help you find the account that best fits you.
READ MORE: So You’ve Got a Great Business Idea … Here’s How to Find Investors
The future can be frightening as a young person, but we can take steps to set us up for success. If we’re responsible enough to reign in our spending habits and to make these three investments when we are young, we’ll have set ourselves up for a better future.
