Finance Tips For College Students and Young Professionals

When you’re suddenly independent from the bank of mom and dad, it can be tough figuring out how to manage money all by yourself. After all, you have to figure out how to budget, apply for a credit card, and pay off any loans you have. If you’re not sure where to start on your financial journey, we’ve got your back. Below, we’ve compiled some commonsense finance tips to help you manage your money and feel more confident about your fiscal future. Keep reading to learn more. 

Tip #1: Practice Delayed Gratification

In our world of near-instant shipping, it can be tough to fight off the allure of cheap consumer goods. But, you should always keep your finances organized and in line with your future goals. Although a credit card makes buying something feel painless, do you really want to pay off interest on groceries or something else? 

If you’re having trouble managing the tangible effects of spending money, it might make sense to pull out hard cash and apportion a certain amount to spend each week. This can help you break a credit card habit. 

Tip #2: It’s Never too Early to Save for Retirement

When you’re really young, it can be hard to imagine a future where you’re retired. But it’s critically important to start saving for retirement as soon as you possible can. Current experts suggest saving at least $1.5 million in your bank account to live off during retirement. 

If you have an employer who offers a retirement plan, make sure you put aside a portion of your paycheck to pay for it. And if your employer doesn’t offer a retirement account, you can open up an individual retirement account (IRA). 

Remember, the earlier you start saving, the more time your money has to grow via the magic of compounding.

Tip #3: Prepare for Your Taxes

Whether you’re using hosting for ProSeries & Lacerte tax software, or just doing your taxes the old fashioned way with a pen and paper – it makes sense to prepare for your taxes. If you’re confused about your taxes, you can also consult with a tax professional and they can walk you through your tax documents step by step. It’s a great way to learn more about taxes and how you can reduce your tax burden.

If you’re planning on itemizing your deductions, make sure that you’re saving the receipts for all of your expenses that can be written off. It’s important to have evidence every step of the way. 

And remember to keep your tax returns for at least seven years, that’s how far back an IRS tax audit can go. 

Tip #4: Keep a Healthy Emergency Fund

Living paycheck to paycheck isn’t just stressful, it can also cause you irreparable financial harm. It’s incredibly important to keep a healthy emergency fund in your bank account. An emergency fund can help you out if you have a catastrophic problem with your car or a sudden medical issue. Those extra dollars can give you serious peace-of-mind that you’re ready for pretty much anything that comes your way. 

Tip #5: Grow Your Money

If you have a healthy emergency fund and you’re current on all your bills, it’s a good idea to set aside some of your money in an investment account to grow your wealth. Alternatively, you can tuck some of your money into a certificate of deposit, a money market account, or a high-yield savings account. There are plenty of ways to grow your piggy bank while still enjoying your life. But whatever you do, make sure you don’t just stuff your money under your mattress – that just means you’re losing money to inflation. 

Takeaways: Learning How to Manage Your Money

Managing your money isn’t always easy or straightforward. It can be confusing navigating financial lessons all by yourself, especially because personal finance isn’t typically a topic covered in school. So, make sure you take steps to protect your wealth like putting your extra money into an emergency fund. Prepare for your taxes well ahead of time and don’t forget to save for retirement. With these tips, you can ensure a strong financial future.