Smart financial goals to set while you're still young
Start with planning and resolutions, then take gradual steps toward later rewards.
It doesn't have to be a new year to make resolutions that will set the stage for long-term financial success. Here are some financial goals for young adults you can start working toward today:
Know your credit score
"If a home purchase is in your future, check your credit report now", urges Marc Shaffer, a certified financial planner in Overland Park, Kansas. You'll be able to review your credit history and report any errors or omissions to the credit bureaus. You'll also have more time to improve your score. A good credit score can improve the Annual Percentage Rate (APR) you get on your loan, which can save you thousands of dollars in the long run.
Identify where and how you are spending your hard-earned dollars so you can plug money drains. "You really do need to track everything and create categories to put things in perspective," says Shaffer. Software and apps such as Excel and Microsoft Money make budgeting and tracking expenses easy.
Manage credit card debt
Review your credit card statements and assess which debt you can tackle first. Get a feel for the payoff amount needed to reach your debt repayment goals using our monthly payment calculator.
"As a young professional, your biggest asset is not your retirement account, but your ability to earn money," says Shaffer. Protect your paycheck by obtaining disability and life insurance coverage. Disability insurance coverage replaces a portion of your income if you cannot work due to a disabling accident or illness. Life insurance offers long-term security for you and your family in the event of the insured person's death.