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College graduates and others of a similar age who are ready to leave the nest and venture out into the world on their own still have quite a bit to learn. As parents, you have to accept that you won’t be able to teach them everything—some learning will come from their own experiences and exposure to things in the world. But it’s never to late to give them some stellar money tips that will help them presently and in the future.
Two very important money tips—tracking your money means discovering and detailing where every last bit of your paycheck goes. Create a list of the average amounts spent on bills, rent, food, gas, household items, and any additional spending on luxury items, entertainment, etc.
Once you know exactly what you spend, you can create a budget that will better help you set aside the right amount of money from each paycheck to ensure you have enough for bills. You can also discover where there is wasteful spending, try to minimize large expenses, and see what can actually be saved instead of spent. Which brings us to money tip number 2 …
If your current job offers you a 401K or other retirement plan, great. If not, try to put aside 20-25% of your paycheck for savings (or as much as you can if you cannot reach that mark). Doing so gives you a great head start on accumulating a large amount of savings for future endeavors or retirement. Talk to a financial advisor about how to invest your savings for maximum growth potential.
Debt can quickly rack up if you aren’t prepared to pay off the credit card balance each month. Understandably, you may want to use credit cards for the rewards—just try to pay off the balance each month to avoid interest, as the rewards are actually pretty worthless if you find yourself paying more in interest each month a balance remains.
Having more than one skill can come in very handy in the future, enabling you to effectively earn more income. You don’t necessarily need to overextend yourself with two jobs, but maybe you can work from home or on the weekend doing contract and freelance work with a secondary skill.
There is, of course, much more wisdom to impart, but these important reminders to budget, save, and avoid unnecessary spending are the key components of a successful financial future.