7 Ways To Become A Financially Responsible Young Adult
6 . Start Saving for Retirement
Most young adults believe that retirement is something that they will worry about later as they get older. Retirement is the furthest thing on their mind so they feel that it would be a waste to start planning now. Because of compound interest it is imperative for you start as soon as possible. Compound interest is simply earning interest on your interest plus your original investment, so the sooner your start the more time your money will have to grow. For example: If you were to invest $500 a month at a rate of 11% starting at age 30 until you’ve reached 50 you would earn roughly $400,000. If you invested the same $500 a month at the same rate but ten years earlier at 20 by the time you reached 50 your investment would be worth $1,402,250. In that example you would be giving up $1,000,000 for waiting.
Most companies offer company sponsored retirement plans so make sure you take full advantage of those. If they don’t, you should open up an IRA (Individual Retirement Account) with your bank.
7. Protect Yourself
Comedian Chris Rock once joked that they should start calling insurance “Just in Case l give a company some money in case something happens. Now, if nothing happens, shouldn’t l get my money back?”
Jokes aside, the price that you pay for insurance protection is minor compared to what you would have to pay if you were not insured. Make sure you are protecting yourself and your assets at all cost. This includes health insurance, renter’s insurance, disability insurance, and even life insurance if you have people who depend on you. Don’t take this lightly, you are at a pivotal moment in your life and the decisions you make today will have a direct effect on you tomorrow.
The Sooner you become a financial responsible adult the sooner you can spend time living and enjoying life! Those who fail to plan also plans to fail! Don’t lose the game way before you even started.
Ash’Cash is a Business Consultant, Motivational Speaker, Financial Expert and the author of Mind Right, Money Right: 10 Laws of Financial Freedom. For more information, please visit his website, www.iamashcash.com.