September 6, 2021

6 Money Saving Tips for Young Adults

Unfortunately, a class titled “Finance for Young Adults” usually isn’t part of a high school curriculum. Here's everything you need to know to get started with personal finance in your 20's

9 min read

Qoins Staff

@qoinsapp

1. Start an emergency fund

Another good way to save for financial hardship is to start an emergency fund. One of personal finance’s most-repeated mantras is ”pay yourself first." No matter how much you owe in student loans or credit card debt, and no matter how low your salary may seem, it’s wise to find some amount—any amount—of money in your budget to sock away in an  every month.

Having money in savings to use for emergencies can keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a nonnegotiable monthly expense, then pretty soon, you’ll have more than just emergency money saved up—you’ll have retirement money, vacation money, or even money for a down payment on a home.

2. Pay off your debt

While putting money into savings is a good way to prepare for your future, you should also be concerned about paying off your debt. You should be aggressive about paying off debt and careful not to let your credit cards spiral out of control.

For example, holding $9,000 in credit card debt while making just the minimum payments can take over 20 years to pay off with the total payments totaling over 2 times as much as the starting balance! Holding credit card debt specifically is a very costly mistake, so while you're young cut it out and have the discipline to avoid it.

3. Make a budget

You’ve heard it before. Creating and sticking to a budget is one of the best ways you can save money. Making a budget doesn’t mean you have to give up fun for the rest of your life. By doing so, you’ll be able to see where your money is going each month and allocate funds to saving, bills and entertainment. Once you see how your morning java adds up over the course of a month, you’ll realize that making small, manageable changes in your everyday expenses can have just as big of an impact on your financial situation as getting a raise.

In addition, keeping your recurring monthly expenses as low as possible will also save you big bucks over time. If you don’t waste your money on a posh apartment now, you might be able to afford a nice condo or a house before you know it!

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4. Guard Your Health

If meeting monthly health insurance premiums seems impossible, what will you do if you have to go to the emergency room—where a single visit for a minor injury like a broken bone can cost thousands of dollars? If you’re uninsured, don’t wait another day to apply for . It’s easier than you think to wind up in a car accident or trip and fall down a flight of stairs.

If you’re employed, then your employer may offer health insurance, including those that save on premiums and qualify you for a (HSA). If you need to buy insurance on your own, investigate the plans offered by the of the Affordable Care Act (ACA). There are federal plans, or your state may have its own plan. Look at quotes from different insurance providers to find the lowest rates and see if you qualify for a subsidy based on your income. If you have health issues, know that a more expensive plan could be cost-effective for you. Research all your options.

If you’re under age 26, then your best choice may be to stay on your parents’ health insurance if they have it.

5. Develop your marketable skills

Unless you’re incredibly lucky, you won’t land your dream job after college or even a few years after you’ve graduated. Millennials tend to switch jobs frequently to find the right workplace for them. With each job, you’re hopefully picking up new job skills, but you should also try to make yourself more marketable by asking to take on new and different responsibilities at each job. Picking up more skills will improve your ability to land better jobs. Learning doesn’t stop just because you’re done with school.

6. Learn self-control

If you’re lucky, your parents taught you this skill when you were a kid. If not, keep in mind that the sooner you learn the fine art of delaying gratification, the sooner you’ll find it easy to keep your finances in order. Although you can effortlessly purchase an item on credit the minute you want it, it’s better to wait until you’ve actually saved up the money. Do you really want to pay interest on a pair of jeans or a box of cereal?

If you make a habit of putting all your purchases on credit cards, regardless of whether you can pay your bill in full at the end of the month, you might still be paying for those items in 10 years.

If you want to keep your credit cards for the convenience factor or the rewards they offer, make sure to always pay your balance in full when the bill arrives, and don’t carry more cards than you can keep track of. This financial tip is crucial for creating a healthy future for your credit history.

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