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Having a solid financial path is key to long-term success. Unfortunately, many people get a jump start on their finances too late because they are not sure where to begin. Here are five ways that you can get a head start on financial planning so that you can have the future that you want.
1. Start Building Up Your Credit Early
One of the determinants for getting any loan is your credit score, but you can’t have a score without first establishing some sort of credit. One of the biggest factors that goes into your credit score is how long you have had your trade lines open, so the sooner that you can open a credit card or take out a loan, the better it will be for your credit. You should always build credit responsibly and balance taking risks by doing secure things, like balancing out an unsecured loan with a credit card.
2. Land a Job
This seems like a no-brainer, but one of the best things you can do to be financially successful is to have a reliable source of income. Even if you aren’t planning on staying with a job for the long haul, having a steady source of money coming in will help you start to establish those lines of credit and will help you become more financially independent. Sometimes, jobs that you take on to get just a little bit of cash on the side can end up opening the door to your career, like how freelance writing can awaken a passion for journalism or how renting out an Airbnb can help you make your way into the hotel industry.
Taking initiative over your finances is one of the hallmarks of a responsible adult, and it’s really never too early to start. Planning today will help make sure that tomorrow will be a good day.Tweet This
3. Start Saving for Retirement
Even if you are still in college or haven’t even made it to thirty yet, it is still immensely important to start saving for retirement. The retirement of your wildest dreams is possible, and it becomes more achievable the earlier that you start to put your money towards it. This is especially important if your current employment situation doesn’t offer much in the way of retirement planning. That means that it is up to you to responsibly set aside that amount of money for your future. Furthermore, Americans’ number one financial regret is that they did not start saving for retirement earlier. Don’t be like the rest of the country; start saving while you’re young and you’ll be thankful when you’re older.
4. Take Out the Least Amount of Student Loans Possible
When you’re starting out as a freshman in college and you’re not sure what the future will look like, it is tempting to let a lending institution talk you into an ample amount of money so that you won’t have to worry about being in debt with your institution. However, this is incredibly dangerous because starting off with a mountain of student loans sets you up for the inability to have the financial future that you want. Take out what you need and what you need alone and you will thank yourself for it later.
5. Take Risks While You Can, but Be Ready to Fail
This means that while you still have money in your pocket, invest in the occasional risky stock. Try out a career shift before you lose the ability to learn new marketable skills. Who knows, the risk that you take today may pay off tomorrow. However, you should always have a plan in case things go awry with this risk, like a rainy day fund.
“Knowing exactly what your potential employer seeks in an employee is going to be one of your strongest weapons. You must focus not on selling yourself, but on selling the version of yourself that will do the job.” – 8 Things That Differentiate You From Other Candidates
Taking initiative over your finances is one of the hallmarks of a responsible adult, and it’s really never too early to start. Planning today will help make sure that tomorrow will be a good day. Balance is key when working on your financial future, so be sure that everything you do, you do responsibly.