You've probably heard it from your parents: it's best to start saving now rather than later. Although you may want to go out and explore the new city you've moved to, or hang out with your friends after work, it's important to start planning for the future.
You have to start somewhere when it comes to saving up money for future purchases and investments (a car, a house, vacations, etc.), and Cape Cod Wealth Strategies & Insurance Services, LLC is here to help. Our financial advisors on Cape Cod know how difficult it can be to navigate through young adulthood -- let alone try to figure out a sound financial strategy -- which is why our financial tips below are specifically geared towards those in their 20's.
Realistic Financial Strategies for All 20 Somethings
- Adopt Some Self Control. Understanding how credit works, why debt isn't always a good thing, and what interest rates are will get you far in life. It can be tempting to purchase an expensive item via credit, but the best thing you can do to avoid interest rates is to be able to pay off that purchase shortly after it's been made. Self control comes into play when you want to purchase that item but don't currently have the funds to pay for it.
- Open & Contribute To An Emergency Fund. Whether you're fresh out of college and looking for a job or you're in your mid to late 20's with a steady income, it's always a good idea to have an emergency fund. This "just in case" fund should not be accessed for you to purchase everyday items. Instead, use this to move to a new city, but a down payment on a car, or pay a few months' rent if you find you're out of a job.
- Open an Employee Retirement Account. Once you've finally landed that first full time job, make sure you ask what type of retirement plans they offer. Most employers will offer either a 401k, 412(e)(3) or some form of IRA account through which you should look to set up as quickly as possible. It is important to ask how long you will need to work at the company before being able to start contributing, as some employees may need to wait a full year.
- Understand How Taxes Work. This is crucial! Our financial advisors are always here to help our clients understand how taxes work so that they can plan for retirement accordingly. Taxes depend on your income, so it's important to be able to calculate your payroll taxes and what your take home pay will be before accepting a job offer. Cape Cod Wealth Strategies & Insurance Services, LLC can sit down with you to discuss how much you will be able to put away into savings or retirement accounts after taxes are calculated.
- Choose Your Significant Other Wisely. While we aren't here to provide dating advise, we can attest to the fact that couples who manage their money properly are less likely to have disputes over finances in the long run. When things start to get serious, we highly recommend having a chat about spending habits; any college debt or credit card debt that hasn't been paid off and inquiring about general living habits will help you make a decision where financial compatibility is concerned. Our Cape Cod financial management company often manages joint accounts for spouses as well as private accounts.
- Protect Your Wealth. You work to earn the money you do, so why not protect it? These days there are many options for individuals to protect their financial assets. If you rent an apartment, opt for renters insurance. If you own a car, purchase car insurance. If you work, don't forget disability income insurance. There are dozens of ways to protect your wealth as well as ways to grow your net worth strategically with the help of a financial advisor.
When To Hire a Financial Advisor
It you're looking to really maximize your wealth over time, your best bet would be to look for a professional financial advisor to help you get there. Wealth management companies have the qualifications and the credentials to diversify and grow your portfolio as well as help you plan for retirement. Cape Cod Wealth Strategies & Insurance Services, LLC is here to help residents on Cape Cod come up with a customized, strategic plan that works best for you and your budget. Using industry technology and market trend analysis, we will curate your portfolio so that it grows and changes over time. Contact us to learn more about our financial planning and wealth management capabilities.