Personal Finance For Young Professionals
As a young adult, you might not think about the importance of savings or the general concept of personal finance. We all know naturally that we should have a savings and eventually we will invest in a 401k plan and retirement funds. But do you really need to be saving right now? The short answer is yes. Your personal financing plan should start as soon as possible. If you are a young professional who isn’t sure where to start when it comes to financing, contact Joyce CPA, LLC in Cutler Bay, Florida to guide you through all you need to know to start saving money!
Here are some initial steps you can take to start saving for retirement now:
1. Observe Current Finances
Getting to know your finances before you invest is the first step in generating a 401k plan and a potential 401k audit. Learn what your company offers in regard to 401K plans. Then go over your monthly bills to determine how much of your weekly or monthly income you would like to contribute to your 401k. This can and will change over time, but getting started now is sure to leave you with a comfortable fund by the time you reach retirement.
2. Personal Finance and Building Credit
Pretty much as soon as you have your first job, you learn about your credit and credit scores. Credit scores will be the major determining factor in many of your life’s big decisions: buying a car, a house, or even a business. Building good credit is essential to maintaining the lifestyle you want from now until retirement. A personal or student loan is typically how young professional start building credit, however, getting at least one credit card is recommended. It may seem intimidating at first but having this pathway to build credit will only benefit you in the long run.
Most people plan on saving, but because of life’s unexpected issues, those savings tend to get tied up or used during a tight pinch. One simple approach to take when it comes to savings is don’t say—do. Make sure you are taking a little from each paycheck (even if it is only twenty dollars) and putting it into savings. Over the years, you will be surprised how much it adds up.
If you plan on having a hefty retirement to fall on, then being solely dependent on your day job won’t get you there. Some of the most financially successful people learn to supplement their salary with income from their investments. Take to your CPA about how much you can afford to invest so you can determine your return by the time you reach retirement.
It all comes down to planning. First have a number in mind that you would like to reach by time you hit retirement. This includes deciding what age you expect to retire. Work with a CPA to observe your current finances and plan from there. They will talk you through additional information such as a 401k audit and return on investments. They are going to guide you on how to build credit and save accordingly. But most importantly, they will have you look at potential investment opportunities in order to exceed even your own personal finance expectations.
If you are a young professional that is willing to get started on your personal financing adventure, or you have questions about a 401k audit, contact Joyce CPA, LLC in Cutler Bay, Florida for more information!