It sounds like the last thing you want to do when you start out on a tight budget, but starting to save even a small amount early on in your career can pay dividends. (That was a pun.)
If your employer offers a 401K plan, signing up is a no-brainer. Many companies will match your contributions – generally between 3-6 percent of your salary – so you’re effectively getting free money.
Both advisers suggest saving into 401K, and then open and save what you can into aRoth IRA, which you can withdraw tax-free in retirement.
Pay down debt
If you’ve just come out of college, chances are you’ve got a ton of debt hanging like a millstone around your neck.
You might think that student loans should be the priority, but Middendorf says you should instead focus on any “bad debt” you have – such as credit cards that can carry interest rates north of 20 percent.
If you have any money left over after your rent, bills, living expenses, debt repayments and retirement savings – depressing, isn’t it – then you should put some aside in case of emergencies.
Middendorfe says you should ideally have a 6-12 months* of earnings set aside in a rainy day fund to soften the blow of an unexpected bill or sudden unemployment.
Keep to a budget that allows you to save, taking advantage of coupons and special offers. Make lists, and stick to them, before shopping. Smartphone appssuch as Mint’scan help keep track of your spending.
*In our view, this is a ridiculously optimistic amount for someone just starting out – but save what you can.
Build your credit rating
Credit cards aren’t bad if you use them right. If you’re looking to eventually buy a car or a house and you want to get a good deal, you need to work on boosting your credit score.
Having a credit card and paying it off entirely each month so you don’t accrue interest payments helps with this – plus there are plenty of cards out there that offer cash back, airline miles, or other rewards for using them.
“Treat it just like cash,” Christenson says. “If you don’t have the money in bank, then don’t make the purchase.”
Author:Darik Steinbach Phone: 952-239-4290 Dated: January 31st 2017 Views: 104 About Darik: I have been selling residential real estate in Minneapolis full time for 10+ years.
View our latest blog posts in your RSS reader. Click here to access.
A home is not a home because of its room dimensions or the color of the walls. It is about how you feel when you walk through the front door, and the way you can instantly envision your life unfolding there.
This is about more than real estate. It is about your life and your dreams.
Thank you for spending the time in getting me into my new home! And for putting up with apprehensive me during the process. I am happy in my new townhome and although still getting settled in, I am enjoying it. Again, thank you for your knowledge of knowing how to put it all together with selling & buying. Everything worked as you said it would!