By: Ted James
Moving out on your own for the first time can be exciting, scary, and confusing all at the same time. And when it comes to your finances, there are several things you should be prepared to handle. Saving money, raising your credit score, building credit, and maintaining your checking account are important ways to ensure financial freedom, but where do you begin? For most, it starts with some savings, but you can also think about other ways to plan for the future, such as investing in life insurance. There’s no time like the present, so let’s get started.
Save On the Items You Need
When you’re moving out on your own, you’ll likely need some things for your new place, such as a television or computer. A good rule to live by is to shop around a bit before making a decision about more expensive items. It may take a little time, but you can save a lot of money by comparison shopping and hunting for deals at retailers.
Start Saving
While there are many ways to save money, it’s a good idea to start a savings account so you can see where your money is going. Keep in mind that not all savings accounts are created equal; there are many different types out there — and some require a minimum balance — so it’s important to shop around to find the one that fits your needs. Also, create a realistic budget that you can maintain; this will involve taking a detailed look at your spending habits and keeping track of expenses.
Plan Ahead
It’s never too early to start planning ahead. No matter your age, it’s a good idea to start thinking about your funeral expenses and wishes. This will help your loved ones manage more easily when the time comes, as they won’t have to worry about finding the funds to cover a funeral and/or memorial. Life insurance is helpful to family members after an unexpected death, and it can help with more than funeral expenses; it can also cover medical bills and other debts. Keep in mind that there are different types of life insurance coverage and that some payout faster than others. If you feel you need something that will pay out immediately, consider burial insurance.
Build Credit
Building and understanding your credit can be tricky, especially when you’re just starting out. It seems you can save and be careful with your finances for a long time and only see your credit score move up a point or two, while one misstep can bring crashing down. The key is to be careful about your purchases and to make sure you’re paying all your bills on time, especially car loan payments, student loans, medical bills, and credit cards. These bigger-ticket items will drag down your score pretty quickly if they aren’t paid on time. Use an app to monitor your credit; this will help you stay on top of any changes.
Managing your finances and building up savings can take some time, so be patient with yourself as you learn the ropes. Making sure your budget is realistic can go a long way toward helping you stay on track for the long run.
Ted James is a professional financial counselor and coach with an MBA in Finance. He’s a husband, father, dog owner, and rock climber living in the Pacific Northwest.
