Here is my unsolicited and unprofessional advice about money! I am not a professional financial adviser!!! However!!! The likelihood of any of you tween babies going to an adult financial adviser is very slim so I will offer you the advice I have accumulated through my own advisers and experiences. I still think you should visit an adviser via your school if you can or whatever. They really help! Most colleges have one through career services or something. Okay so.
- Have a checking account. Look into minimum balances and fees! Maybe you would be better off with a Credit Union than a traditional bank? Which is most convenient and affordable to you? I use a bank and a large one and I am pretty happy with it for checking account services. Look for a bank with free services and a low opening balance. Maintenance fees add up — you could pay $100+ a year just for someone holding your money. You don’t want to have to lose money because someone is holding your money! It’s insult to injury. If you are a student there are several options for you that will suit your needs. Read this article! Maybe you would be even better off with an exclusively online bank! There are several.
- You better be checking your statements monthly for discrepancies in your purchasing. For this, please keep track of your expenses. Keep all your receipts. You don’t need to keep paper copies, you can scan them in. There are apps for that on smartphones. I use Wave. It is glitchy but it works for me. There are many options out there. But you should be consistent about it. Research some on your own time. I’m not saying this to be anal but actually it’s not uncommon for places to double charge you, and sometimes frauds and scammers will take tiny increments from your checking if they gain access…..2 cents from millions of people adds up to a lot of money. So keep track and if you see anything suspicious call up your bank ASAP and fight that charge, no matter how small.
- Okay you have a checking account. You wanna save money? Don’t just lump all your money in one place because you’re more likely to spend it. Get a savings account — or several! Maybe one for a vacation you wanna go on, and one for student loans repayment or whatever. It’s perfectly normal and good to have multiple savings account and you don’t have to stick to your checking account bank. Find one with high APY and a low opening balance. The best out there for USA residents is GE Capital Bank. It offers the highest yield nationwide and they have a calculator too so you can see how much they make for your savings which I love. Here are some other options.
- Every paycheck, I want you to set aside money automatically via automatic transfers to your savings account. Taking out necessity expenses like rent, food, etc, there is a fixed amount you want to be saving out of every paycheck. If your job offers a 401(k) you want to look into that and throw money into that so you are saving for retirement. Throw as much as you can (look into the maximum contribution allowed) into that plan because your company will match that amount (maybe not $1 for every $1, like I said, look into it).. This is free money from your employer and lowers your taxable income. Yay less taxes! Here is an article about 401(k). Even if you leave a company, you can transfer your 401(k) to the next company you work for. Take advantage of 401(k)’s when you have them! You always want to be saving for retirement. I know it’s a long way away but cost of living is only going up so the earlier you start the better off you are. Ideally you wanna throw 10% of a paycheck into your 401(k) if it’s available to you.
- Anyway back to savings. You wanna throw in like, 30% of a paycheck or however much you can into your savings. Some people pay themselves out of their savings and live very frugally this way — throwing it all in and taking out what they need to pay necessities etc. I don’t do this, I just automatically set up bi-monthly transfers around paydays so I just never see money, it just goes into savings. If you don’t see it, you don’t want to spend it. This is effortless saving.
- You get a big bonus at a job? Or an inheritance? Instead of splurging on something consider opening a CD. CD’s are basically time capsule savings accounts with higher interest rates, you throw your money in, they generate more money, after 2 years or x amount, you take your money out and voila more money. Look into places with high APY for CDs. The bank I mentioned above (GE Bank) is great for this. This might be more effective if you have several thousand dollars you don’t plan on using anytime soon. Just let it accumulate into more money.
- Really try to keep a budget. I’ve written about this before for Teen Vogue, the apps I use. These are super important to me, and they keep me accountable to my budget. Am I spending too much on fast food one month? How many years till I pay off my loans at the rate I’m throwing money at them? These apps keep me updated. One of them comes with a free financial adviser you can talk to on the phone and they help you figure out the best kind of plan for you with your budget and your current income. This is amazing and you should look into it!
- You don’t need a credit card. You really don’t. I mean. A debit card is better for you in terms of your financial accountability because you won’t be spending money that isn’t already yours. You do want to build credit but you don’t necessarily need a credit card for that. If you have billls like a phone bill you can pay that with a debit card and as long as you’re doing it on time you are building credit. Building credit is a long and difficult process and the lure of credit cards are super dangerous so think long and hard about if you need one or just want one. This is up to you! Research.
- I’m not gonna talk about taxes because i know fuckall about them and I hire an accountant and write off the accountant during said tax time and it’s absolutely worth it because I am too anal and neurotic to deal with the concept of the government taking away my money and then giving it back to me so I don’t deal with it at all. Instead!!! I let someone else!! Yeah!!! Fun.
Okay that is your crash course on adulting your money I hope it helps you good job high five. Once again I am not a financial adviser I am just being a mom but I hope I made some things clearer for you and if you have any questions you can ask I will try to help but you should be proactive and ask a professional in your area so they can break it down for you in all their professional glory. Okay!! Good talk.