Young Adults
Twenty-somethings may not realize it, but every time they enter a new phase of their life as young adults – perhaps starting college, a career or a family – they’re also venturing into a new world of money management. Here are ways to be prepared.
- Save money that could make your dreams a reality.
Put money aside for purchases you expect to make in the next few months or years.
Create a budget that includes: how much you earn each month, how much you pay for essentials like rent or transportation, and how much is left over for everything else.
Arrange with your financial institution and employer to automatically transfer a certain amount each month to a savings or investment account.
- Build a good credit record.
Always pay your credit card bills and other debts on time.
Charge on your credit card only what you can afford to pay off immediately or within a reasonable time frame.
Whenever possible, pay your credit card bill in full each month or pay as much as you can above the minimum amount due.
- If you need to buy a car, consider the best way to pay for it.
Monthly lease payments are usually lower than monthly loan payments but at the end of the lease you don’t own the car you’ve been paying for. If you buy, you have a vehicle you can sell or trade.
- If you’re renting a house or apartment, consider if it’s time to buy.
Look at the costs of renting versus paying a mortgage.
Buying a home includes paying real estate taxes and insurance, mortgage interest payments and the cost of maintenance.
However, the upsides to buying a home are tax benefits, the potential for your home to appreciate in value and the satisfaction of having a place to call your own.
The above information is an excerpt taken from a new Federal Deposit Insurance Corporation (FDIC) publication titled, "Money Tips for All Ages: Your Finances at Different Stages in Life." The advice, in a special edition of the agency's quarterly FDIC Consumer News, can be read or printed online at www.fdic.gov/consumers/consumer/news/cnspr08.
