How do young people navigate a pathway to financial responsibility? In society, the requirements are varied and continue to change with each passing year. However, some of the core components are much the same as they were decades ago. Having a savings account is usually a sure sign that someone is developing good budgeting habits. Getting a first credit card is another steppingstone on the road to handling money like an adult.
While it can take several years to fully understand how to manage personal finances, mastering essential pieces of the money puzzle serves as a foundation for young adults. That’s especially true when dealing with car insurance, income tax filings, and spending habits. It takes a considerable amount of knowledge to develop a personal budget, but everyone must begin somewhere. Consider the following details about each step.
Learning how to save money is a skill that anyone can learn. It takes time and self-discipline, but the results are worth the effort. On the road to adulthood and independence, saving a small amount of all earned income is one of the core elements. Even teens who work part-time summer jobs can set aside 5% of their earnings in a segregated account. Find a percentage that suits your savings needs and develop a savings habit as soon as possible.
Taking out your first credit card while you’re still in college is a smart move. However, it’s essential to review a complete guide on the subject to get all the relevant facts about how the process works. For young adults who know how to live within their means and manage their own finances, finding the right credit card can be a challenge. Not only is it a crucial part of growing up, but it can help college students and recent graduates get a better handle on monthly expenses going forward.
What kinds of card features can make a difference for younger consumers? Look at posted interest rates, monthly fees, annual charges, the length of introductory rates, whether the issuer reports to one or more bureaus, spending limits, cash advance rates, and the stability of the company issuing a given card. It’s a lot of information to take in, but researching the topic before applying for a card gives you the power of knowledge.
Taxes & Car Insurance
Death and taxes are said to be the two certainties of human existence. A sure indicator of social and financial maturity is the ability to calculate personal tax liability or know whom to hire to do the job. For most working adults, employers withhold enough from each paycheck to cover the prospective tax liability.
Self-employed individuals and non-W2 wage-earners can end up paying substantially higher tax bills. Unless your return is considerably difficult, consider trying to prepare the entire document without outside help. Then, if you end up stumped, call on a local CPA (certified public account) or taxation software. Getting car insurance is another significant step in life. The coverage is an essential part of being a responsible owner and meeting state legal requirements. Car owners of all ages must have coverage.