Hey everyone! Today's post is all about different financial related skills, behaviors, etc. that young adults should know.
As a 24-year-old, there are many things that I wish I knew when I was just a little younger.
Yes, I know that I am young, but almost everyone has something in their lives that they wish they would have done just a little differently, right?
Your cover letter does matter.
When I was applying for my first “real” job after college a little over three years ago, I always submitted a cover letter. I do think that this helped me land more job interviews.
However, I know of many people who when applying for jobs never attached a cover letter or never changed the “objective” section of their resume. They would just submit their resume to hundreds of companies in the area and would never get a call back. You are just wasting your time! You need to put in effort. This does matter.
All of those clothing items don't really matter.
Yes, I like to look nice every now and then, and so do others. You can buy a couple of “trendy” items, but you should be buying classic pieces that are quality. Buy things that you know you will wear, and don't waste money on the rest. 10 years from now you most likely won't be thinking about that awesome dress that you wore one time.
I am guilty of this. I went shopping the other day, but it was for the first time in what seemed like forever. I went on a non-official clothing spending fast without even realizing it. However, before I would spend hundreds of dollars on clothes each week without even thinking twice.
This is one of the big money management tips for young adults that everyone needs to realize and know!
Find a different way to pay for schooling.
This is another one of the money management tips for young adults that I wish everyone realized.
College is expensive. And I'm sure that there are different ways that you can pay for it, instead of entirely relying on student loans.
I finally eliminated my student loans in July of this year, which is awesome, but I did graduate from undergraduate school over three years ago. I do think that if I would have tried harder and not taken out so much to fund my shopping habits, that they could have been done much more quickly. I sure am happy though!
Understand what a credit score is, and how you can improve it.
Many people do not fully understand credit scores and how to improve it. For example, surprisingly, many people think that just paying the minimum payment on debt with interest (such as a credit card) will actually pay off the debt quickly. NO! You should be paying more than the minimum payment, or you will be paying a lot in interest with each payment. Just paying $25 a month on a $1,000 credit card bill isn't getting you anywhere.
Also, many do not know that carrying maxed out credit card is hurting them. Well, it is. And it's decreasing your credit score.
Credit scores are important. Even if you think they are the devil, at one point in your life you may need it, and you can use your high credit score to your advantage. You can obtain low-interest rates (such as 0%). Or you can use your good credit score to get a mortgage with a low-interest rate.
Read more about a credit score and a credit report.
Buying a house is a big step, and there is no need to rush it.
We bought our first home at the age of 20, and while I wouldn't change a thing, sometimes the negatives of home ownership pop up. For example, just last night, we thought that we would fix a running toilet ourselves. Well, that went downhill really quickly and a water line burst and flooded our bathroom. We had to call an emergency plumber and that cost $225 for him to fix something that should have only cost us $20 if we would have done it correctly the first time.
If you need to rent your first, second or third place (or whatever for that matter), that is fine. Renting is not always throwing money away. If you rush to buy a house and hate it, you will likely be wasting much more money.
Life is meant to be enjoyed.
I am finally realizing this. Life does not have to be a race to the finish line. I finished with two undergraduate degrees by the age of 20, and then received my Finance MBA at 23, all while working full-time. I don't know why I did this. Yes, I did have fun, but I often think about how much fun I would have had if I studied abroad or took summers off to really enjoy myself.
I am changing this now. I have some travel plans made, and want to make some more. We are thinking about long-term travel as well.
For us, we also like to have hobbies, and some of our hobbies include cars. Not everyone enjoys cars, but we truly do. We like our Wrangler, because it's fun to drive around in, we like our Camaro because that's of course fun also. We also have a classic truck, but we are going to sell it because we have been letting it deterioate, and any good car person should know not to let that happen. We would rather someone else enjoy it. If you've never had your license before, then getting temporary learner driver insurance from ILD is important just in case something happens while you are learning.
Money Saving Tip – No matter how much money you make, some sort of budget is always important.
Yes, another money management tip for young adults. I don't care how much money you make, a budget is always a good thing. If you've never ever had a budget and you have never saved a dime in your life, then a budget is needed. If you are not saving enough money then you should create a budget and see what needs to be eliminated.
Whatever you enjoy in life, your job should allow for that.
I understand that not everyone wants to find passion in their jobs. Some just want to go to work, make a paycheck and go home. They only care about the money. However, I do think that there should be at least some sort of positive in the job that you have. Maybe if you don't LOVE your job, it at least allows you to do what you love in your spare time – such as work on cars, travel, volunteer, etc. If you don't know much about your company, research its Business Profiles before you partner with them.
Read What's Stopping You From Living Your Dream and Being Defined by Your Job or Career.
What other lifestyle and money advice for young adults would you give?
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Remember you don’t have to live like your parents when you’re first starting out. It took them years to get there and there’s no need to feel like you’re living without if you don’t have the same type of life.