Let’s face it, when you are done with school and entering the workforce as a full-time employee, you’ve got a lot of “work years” ahead of you. Unless you hit the jackpot, you will probably work for the next 30-40 years. So, now’s the time to lay the foundation for a secure financial future. You may be thinking, “I’ve got time” but the longer you wait, the less time you have to let your money work for you.

Here are some smart money moves you can make now to set yourself up for financial success in the coming years.

1. Implement the 50/30/20 Rule. This is a rough plan for a financial budget to direct your money toward your goals. Know what income you have coming in and then divide up your expenses as follows:
   • 50% to your needs – housing, utilities, food, and transportation.
   • 30% to your wants – travel, dining out, etc.
   • 20% to your future – paying off debts, saving, and retirement.
2. Get out of debt. If you’ve got student loans or credit card debt, pay it off as quickly as possible. Once you are free of those burdens, you can start thinking about making larger purchases such as a new car or your first house!
3. Plan for emergencies. In your20’s, you can’t foresee losing your job or dealing with a medical emergency but the Social Security Administration says that 25% of 20-year-olds will become disabled for some period of time before they retire. Saving 3-6 months of your take-home pay is a smart way to prepare for an emergency. If you can save more, do it and keep it in a separate account so you don’t spend it. Read our new blog about rainy day vs. emergency savings.
4. Start saving for retirement. Retirement seems SO-FAR-OFF but before you know it, you will be in your 50’s and wondering how you can afford to retire. You don’t want to play catch-up with your retirement savings so start investing early so you can start small and let your money work for you through the magic of compounding.
5. Get your employer match. If your company offers a 401K match, take full advantage of that FREE money. Every 401K plan is different, so you need to check with your employer for the details, but the most common match provided by employers is 50% of what you put in, up to 6% of your salary. so, your employer matches half of whatever you contribute but no more than 3% of your salary total. To get the maximum amount of match, you must put in 6%. Don’t leave that money sitting on the table!
6. Learn about insurance. Again, no one expects anything bad to happen but unfortunately, it does. Insurance helps protect you, your stuff, and your savings/emergency fund. Think about medical, renters, disability, and life insurance. Some of these are less expensive the younger you are so take advantage of your youth to save some money.

Smart money management sets you up for a bright (and secure) future. Let us know if you have questions – we’d be happy to help!