Adulting is hard and at Allegacy, we want to help you start the next chapter of your life on the right foot so you can enjoy the life you envisioned for yourself. One of the most important things you can do to be your best as you begin life after college is to make sure your finances are under control and this includes avoiding these common mistakes.
1. Failing to Budget – Our mission is to help you make smart financial choices and the best way to do that is to know where your money is going. What are your fixed expenses (rent, car payment, etc.)? These fixed expenses give you an idea of how much it costs to run your household. Next, take a look at how much you should spend on other financial priorities where there is flexibility in payment such as paying down student loans or credit card debt. Anything left over is what you can spend each month on items such as entertainment, clothes, or groceries. If there is more money going out than coming in, you’ll need to see where you can make adjustments.
2. Too Much, Too Soon – You’ve worked all of your life for this moment – independence. You finally have your own money to live where you want, buy the car that you’ve dreamed of and choose your own vacation spot. Your paycheck is larger than the one you had in college. Life is great. Or it can be if you take the time to settle into your new life and achieve your goals over time instead of all at once.
3. Failing to Save – Every little bit helps and many employers offer payroll deduction that will automatically deposit money into a savings account for you or your financial institution can help you set up an automatic draft. Either way, you’ll have a great start on an emergency fund to pay for life’s unexpected and unbudgeted events.
4. Waiting to Save for Retirement – It seems odd to start thinking about retirement when you’re first beginning your career, but it’s actually the best time to start. Many companies offer plans that match employee contributions up to a certain amount. Not only is time on your side when it comes to your money growing, but the earlier you start, the sooner you can benefit from the ‘free’ money your employer provides.
5. Ignoring Your Credit Report – Many financial institutions use a ‘credit score’ to determine the interest rate they charge – the higher the credit score, the lower the rate. You want to make sure the information on your credit report is accurate to ensure you’re getting the best rate based on your report. You’ll also want to look for ways to ‘clean-up’ your credit to begin building a better score. Do you need to catch up on late payments? Are there credit cards you need to cancel? By knowing the information included on your credit report, you can take steps to improve your credit worthiness and get the best rates possible. To order your FREE credit report call 1-877-322-8228. Or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Transitioning into adulthood is an exciting time and we want to make sure you begin this life stage with a strong foundation. Over the next few weeks, we’ll be providing more details to help you avoid each of these five common mistakes. In the meantime, we are here to help you transition through all of your life stages and we’d love to hear from you. Please visit us at AllegacyFCU.org or call 336.774.3400 to learn more about how Allegacy can help you be your best you.
Ponder, C. (2016). 5 worst money blunders made by millennials. Bankrate.com
The information contained above is for informational purposes only and is provided as a service to our members, and is not legal or tax advice. Some links included on this page route to sites owned by an independent third party unaffiliated with Allegacy. Such links are provided only as a convenience. Allegacy does not manage the operation or content of third-party websites and is not responsible for the privacy or security policies on third-party sites. Beware of disclosing personal or account information.