January 26, 2022
Achieving financial freedom means having enough savings, investments, and cash on hand to support yourself and your family now and through retirement. Sound intimidating? Managing payments, taxes, and credit cards on your own is not easy, but by meeting small goals along the way you can become financially responsible before you know it!
Whether your goal is to move out of your parent’s house, purchase a home for the first time or just get on top of car and rent payments, establishing financial milestones to get you there is a great way to start. Maintaining a budget by using a spreadsheet or app is a great habit for making the most out of your income so you can meet your goals.
Make a goal to open a credit card as soon as possible since the longer your credit history, the better. Establishing a credit score is essential for qualifying to rent an apartment and applying for jobs. If you are under 18 it is possible to have a credit score without opening a credit card yourself by becoming a joint cardholder with your parents. As a rule, pay your balances in full each month to avoid interest charges, use less than 30% of your available credit and avoid closing lines of credit without reason since this can reduce your credit history.
To avoid paying interest on debt long term, make a strategy to pay down your debt in a timely manner. By proactively paying your bills on time, you can avoid late fees and maintain a good credit rating. Many college graduates have large student loan payments to account for, and by looking into debt consolidation or by extending payments over a longer time period, you can make payments more manageable.
Due to compounding interest, the more time your money is put aside in savings, the better. As a general guideline, try to put roughly 20% of your paycheck into savings. If your goal is to move out of your parent’s house, you can prepare each month by setting aside funds for a security deposit or down payment.
For more resources and options, visit your local Citizens First Bank in person or online. Our experienced team can help you on the path to financial independence.