It is now more important than ever to start saving and accumulating your wealth from a young age. With Millennials just starting out in the workplace, there is ample time to start planning a steady and successful financial future. These principles will allow you to get off to a running start in your fiscal life:
Reduce your student loan debt: College is more expensive than ever, and you may be saddled with student debt. Don’t freak out. Instead, think long-term and try to wipe out your debt while saving at the same time. In a few years, you might find yourself surprised at how much freer you feel.
Start saving for retirement: Every penny counts. It may sound corny, but starting a few years earlier than your peers and keeping up-to-date on your funds will put you far ahead of the game. A big decision is whether or not you’ll want to go with a traditional or Roth IRA. Most companies offer the traditional, but the Roth is an alternative that has been growing in recent years since it allows you to withdraw earnings tax-free.*
Watch your credit score: This is something you can begin work on from a young age. Credit plays a large factor in qualifying for a loan and the interest rate that comes along with said loan. Taking steps earlier to maintain a good credit score, such as paying credit card bills on time, will only serve to benefit you in the long run.
Invest regularly: Interest rates may generally seem low and not worth putting money towards, but the money can still add up over time (especially when compounded annually). After all, saving is almost always a safer strategy than saving.
*To qualify for the tax free penalty free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to $10,000 lifetime maximum). Before taking any specific action, be sure to consult with your tax professional.