Finance Tips I wish I knew Before I started Adulting

By Brent Archie

Financial Correspondent

Adulthood is often a delicate balance of learning knowledge and being able to skillfully apply it to one's own personal situation. One portion of the dance that most all adults have to deal with is the often-dreaded financial tango of navigating self-budgeting, family budgeting, as well as preparing for retirement and other fiscal goals set for yourself. That being said here are a few financial dance moves I wish I would have known before I entered the grand ballroom of adult fiscal responsibility.

1. Don’t overspend on transportation. Most experts recommend not spending more than ten to fifteen percent of your monthly income on it. This includes the price of the vehicle principal and interest, insurance, and maintenance. Try not to finance a vehicle for more than four years if possible.

2. Don’t overspend on a house to try to impress family members or peers. Experts recommend that your housing budget be no more than thirty percent of your income. It's also best if you’re a homeowner to factor in mortgage interest, maintenance, and property tax. If you’re a renter, it is recommended that you also factor in utility cost.

3. Try not to overspend on your child. As a parent, it's typically understood that you would like to give your kid the best life possible. However, it's important to not try to overspend in order to provide them what you think is best for them. For instance, the payday loan industry often sees a significant rise in loans during the winter holiday months. This is a daunting situation as payday loans can often be at such a high interest rate that paying them off is nearly impossible. Most gifts given to children are often old news by the time the holiday season is over, but the interest rate you may be paying on them won’t be.

4. Overspending at bars or clubs can be fun; however, it is best not to let the booze, or the moment overthrow the grasp that you may have on your financials. It's best to bring cash on a night out rather than a card so that when you hit your spending limit, you are forced to quit spending.

5. Try not to date outside of your means. If you have to overspend to be with someone, then they probably are not the right person for you. In the long run, you're trying to buy another person’s affection whilst typically derailing the completion of your own financial goals.

6. Do not fall victim to overspending with credit cards. Even with today's cards offering more attractive rewards, it's best to think of a credit card as access to a micro loan that unless you have fantastic credit can often charge double-digit interest on a monthly and sometimes daily rate. It's best to have a credit card for emergency use and to budget for extra

7. Start investing and paying yourself. The sooner you start, the sooner you can take hold of a magical term called compound interest. This is where your money is making money. Look for investment vehicles within your risk tolerance and only use money to invest that you plan on not touching for an extended period of time. Please do not mix your emergency fund and investment fund together. Also look for investments that beat natural occurring inflation which happens at a rate of approximately three to four percent per year. Many bankers and investment firms may try to sway you into a super savings account or Jumbo CD but most of the rates on this type of investment cant keep pace with inflation. I would recommend looking into

8. Take care of your health. Your health is your wealth, and the better you take care of yourself, the less you will pay in insurance premiums and medical bills. Also if needed look to other countries on the globe for health care. What may cost $1,000 in the US for a procedure may be significantly more affordable in other portions of the world.

9. Match your employer's pension or 401K retirement payout if possible. It is practically free money that your employer is incentivizing you to take advantage of by matching them

10. Last but not least, the best tip I wish someone would have told me earlier in life is to continuously keep learning by reading financial education books whilst also bolstering your knowledge through financial training offered online through major trading firms such as TD Ameritrade, Edward Jones, and many other brokerage houses.