Matthew Fassnacht Offers Tips To Young Adults On Financial Planning
The start of your 20s is a time for exploration, but it’s also the perfect time to get started on financial planning. If you are just out of college or starting your first job, this article will give you some important information to help you achieve success in life and keep money worries at bay. In this article, Atlanta, Georgia Investment Advisor, Matthew Fassnacht, covers topics that every young adult needs to know about financial planning so they can be prepared for their future.
Make A Budget And Stick With It
One of the most difficult, yet the most rewarding, lessons for young adults is budgeting and managing money. Creating a budget is the first step in taking control of your finances and preventing them from running out of control. It can be tough to stick to a budget, but it’s important to remember why you created it in the first place — to help you stay on track financially.
There are plenty of helpful tips for creating and sticking to a budget, so make sure to do some research so you can figure out your budgeting style. One easy way to start with budgeting is to use a budgeting app or online tool. These tools can help you track your spending and give you tips on how to save money.
Make Smart Financial Choices With Debt
Matthew Fassnacht says that debt is a scary word for many people, but it doesn’t have to be. There are both good and bad types of debt that you should know about before making financial decisions. A helpful tip when dealing with debt is to only charge things that you know you will be able to pay off in a timely manner.
For example, if you use a credit card to make a purchase, you should almost always pay off your entire balance at the end of the month. Never only pay the minimum amount required, because this will only lead to more debt in the long run.
Use Credit To Your Advantage
Credit can be a powerful tool when used correctly. A good credit score is important for many reasons, such as getting approved for a loan or renting an apartment. One easy way to build up your credit score is by using a credit card and paying off the balance in full every month.
Another way to use credit to your advantage is by taking out a small loan and paying it off quickly. Many young adults opt to purchase a car, which can be great for building up credit. Just be sure to make your car payments on time every month so you don’t damage your credit score.
Start Saving For Retirement
It’s never too early to start saving for retirement and there are plenty of ways to do it. One popular way for young adults to save money is by putting money into a Roth IRA. This is an investment account that has many benefits, but one of the main ones is tax-free growth.
It’s also important to start saving in other areas too. If you have a 401(k) through your employer, be sure to contribute as much as possible each month so you can take advantage of any company matching contributions they may offer.
Take Advantage Of Compounding Interest
Compounding interest is a term that very few young adults understand. Matthew Fassnacht explains that compounding interest is when the interest you earn on your investments compounds or grows over time. The power of compound interest is one of the most powerful financial concepts to understand. Compound interest can help you grow your money faster by earning money on top of previous earnings, which also increases future earnings.
For example, if you invest $100 and it earns an annual return of five percent, then after ten years your investment will have grown to $164. After twenty years, it will have grown to $310.74, which is a pretty neat trick!
This example also shows how important it is for young adults to start investing as early as possible in order to take advantage of compounding interest. The earlier you begin investing, the more time your investments will have to grow and compound. This can be one of the best ways for young adults to secure their financial future.
Start Saving Now!
It’s never too early to start saving for your future. Managing finances is not easy — it takes time, practice, patience, and perseverance. Financial planning is a great way to give you direction and guidance as well as help secure your future.
To recap, start saving for retirement early, use debt wisely, use credit cards to build up good credit scores, and take advantage of compounding interest. Matthew Fassnacht encourages young adults to use these tips as a guideline on how to take charge of their finances and start early on planning for their future!