How to Get Your Adult Financial Life Together

Now that you’ve finally graduated from college, and entered what most people call “the real world,” it’s about time you start working on your finances. For many, this is can be a big and overwhelming step, but if you just follow these expert savings tips, then getting your financial life together will definitely be easier.

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1.       Establish Your Financial Goals

As cliché as it may seem, establishing your financial goals is one of the first steps you should take to get your adult financial life together. You start by dividing your goals into three categories: short-term goals (0-3 years), mid-term goals (3-7 years) and long-term goals (7+ years). After identifying which goal falls under each category, start mapping out a plan of action that’ll help you achieve these goals within their respective timeframe. With this, your financial goals will seem more achievable.

2.       Create a Monthly Spending Plan

A monthly spending plan will help in identifying where your hard-earned cash should go – your needs and your wants. Your needs are the fixed expenses that you have, such food, clothing, rent, transportation, utilities, etc. Your wants, on the other hand, include internet services, cable bills, magazine subscriptions and the like. After identifying all your expenses, create a system that’ll help you pay your fixed expenses in a timely manner. Your wants can be included in your budget, but ensure that you keep track of your expenditures to assure that you’re not veering away from your plan.

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3.       Set an Emergency Fund

An emergency fund is one of the necessities that you don’t realize you need until you actually need it. Emergency situations that require such funding include job loss, medical expenses, auto and home repairs, or any other circumstances that disrupt the flow of your life. You can start creating an emergency fund by setting aside 10 percent of your income until you save a month’s worth of expenses. Once you accomplish that, increase your savings goal to two months and so forth. Remember that your emergency fund should amount to three to six months’ worth of monthly expenses so you’ll have enough lead time to get back on your feet.

4.       Use Your Credit Wisely

Having a good credit is crucial in getting your financial life together. Not only will it help you purchase your dream house and car, it could also help you land your dream job. The first step to wisely use your credit is to understand that it’s not free money, and should only be used for emergencies. It’s also important that you check your credit report once a year to ensure that your credit report is accurate.

Graduating from college signifies an end to your collegiate era and the beginning of your adult life. So start your life in the “real world” right by implementing the aforementioned tips, and you’ll see that being an adult can be fun and enjoyable too.

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