**I am not a financial consultant; these are just the steps I took to begin during a very overwhelming time of learning about money as an adult.
Quick List:
- Budget
- Take company retirement match
- Emergency savings
- Savings accounts – Suggested High-yield savings
- Credit Card
- Investing
Assumptions:
- You likely moved to a new place.
- You are not sitting on a bunch money
- Your family isn’t financially literate.
- You are starting from the beginning and perhaps playing it a little safer.
- Budget:
Figure out what you NEED to spend each month, basic living costs.
Factors: Food, Utilities, Rent, Loans, Gas, etc
For example:
| Rent | $1000 |
| Internet | $70 |
| Gas and Water | $150 |
| Electric | $40 |
| Phone | $45 |
| Car Gas | $60 |
| Student Loan | $400 |
| Car Loan | $400 |
| Insurance | $250 |
| Cat Food and Litter | $50 |
| Food | $400 |
| Total | $2,465 |
The total in the example is the minimum this person would need to survive. Unless they could bring down any of these costs of living.
Then you can decide other money limits. Savings, shopping, etc.
| High Yield Savings | $200 |
| Investing | $70 |
| Netflix | $15.50 |
| Gifts | $30 |
| Shopping | $50 |
| Gym Membership | $50 |
| Total | $415.50 |
2. Take the Company Match:
If your company provides any type of retirement benefits matching, you should do the bare minimum what they will match you.
I.e. 401K match at 4% of your salary then you do minimum 4%. That is FREE money!
I’ve heard that long term you want to average between 10-15% in your 401K. But do whatever you can. Just make sure you have something doing towards retirement savings.
3. Savings for Emergency Fund:
You should start saving for any emergency that comes your way and it will. I started with 6 months of my basic living costs.
4. Savings Account:
If you do not already have a savings account, I suggest starting one. In particular, I suggest High-Yield Savings account. This allows you to make money on your emergency fund. This money needs to be liquid therefore, you don’t want to invest this money but in a traditional savings account you won’t make as much money.
High-yield savings account I recommend: Ally Savings Account
I have used this account for years and have had many friends and family start using this as well. There are other high-yield accounts that other friends have used and also love. This is the one I have experience with and like.
Pro: IT IS FREE and Ally allows you to have buckets. So, you can put money into certain areas. However, it is all in the same account and you can still use it anyway you see fit. I think it is helpful to see it in different areas for some people. If you wanted to put $50 towards saving for a house each week you could and then put $20 towards buying a new car you can put it into different buckets.
Referral: ally.com/referral?code=8J2H2W5P7B
5. Credit Card:
Credit scores are a thing that we need to work with. A credit card is a simple way to build credit. You should NEVER spend money you do not have. I heard many horrible things about credit cards and people misusing them. If you treat them like a debit card, you will be okay!
I had an interesting time trying to get my first credit card. They rejected me because of my student loans. So, I went into the bank and set up a conversation with someone there to get started.
There are many YouTube videos and articles from people that can help you get the best credit card for your situation.
6. Investing:
After you have a grip on your savings and budget you should start investing. There are several ways to go about investing.
A few ways you can invest:
- Treasury Bills (T bills)
- Mutal Funds
- CDs
- EFTs
- Roth IRA
- Traditional IRA
I will say all of these can be overwhelming and stressful. I have found peace with T bills, IRAs, and CDs. It has felt like a safe way to invest money for me when I first started.