Being a young adult can be fun, exciting, and carefree. One of the best parts of being in your early 20s is, well, doing whatever you want, whenever you want.
As a young adult, you don’t have to check in with mom and dad before you get that new tattoo (although it might still be a good idea), and you don’t have to worry about cramming for your final college exam. However, there’s one thing you’re probably worrying more about now than you did as a teenager—money.
Truly enjoying this era can depend on your financial freedom, which isn’t always easy. Trust us, we know. Don’t worry, by taking a few simple steps, you’ll learn how to achieve financial freedom as a young adult. Read on to learn how to start living your best financial life!
We Hate to Break This to You… But You’re Going to Have to Start Budgeting
Making and sticking to a budget might not feel like it’s the key to financial freedom, but the reality is keeping track of where your money goes will help keep your finances in check.
Budgeting doesn’t mean giving up shopping or constantly clipping coupons, it just means distributing your money in a way that makes sense for your situation. Additionally, you can use resources to save while you spend!
Take a look at a few helpful budgeting tips:
- Tackle big expenses first – Figuring out what you need to set aside for big expenses like rent, your car payment, or groceries is usually easier than adding up smaller purchases, so it makes sense to start with big-picture items. Plus, determining what’s left after your biggest expenses can help you identify where to allocate your money.
- Don’t forget subscription services – Everything from streaming, to groceries, to makeup, is now offered via a subscription service. Chances are, you probably subscribe to at least a few of them. Be sure to account for these recurring costs, since they can add up quickly.
- Leave room to have fun – If you don’t leave room in your budget to go out with friends or make a few frivolous purchases, you might be tempted to ditch your budget all together. Don’t be too strict on yourself. YOLO, after all.
Your New Freedom Doesn’t Mean You’re Alone
Although handling your finances on your own can feel liberating, more than likely you’re going to need help at some point or another. Asking for help means you’re responsible and care about your finances, which means you should be proud to reach out when you need to!
Below are some great financial resources to turn to when you run into issues or need to learn more about how to manage your personal finances:
- Your parents
- Financial advisors
- CPAs
- Your bank
- Online personal finance courses
- The HR department at your job
Please, Please, Please Stay on Top of Your Taxes
We’re going to get right to the point on this one—messing up your taxes will cause you an incredible amount of stress, anxiety, and financial hardship. Unless you want to start getting all too familiar with terms like liens, levies, backup withholding, and offer in compromise, please stay on top of your taxes.
Filing your taxes on time and correctly is how you avoid issues with the IRS.
There are tools to help you do your taxes yourself, but if your tax situation is complicated (hello, freelancer life) then you may need to get professional help.
You Aren’t Getting Any Younger (Again, We’re Sorry!)
Using your financial freedom wisely when you’re young can make aging a lot more fun.
Having a long-term financial strategy can help you feel confident about your future. Whether you want to retire early or plan on purchasing a home in the future, a little forethought can go a long way. You’ll thank us when you’re lounging lakeside at your vacation home.
Embrace Your Financial Freedom
Now that you’re armed with the knowledge you need to achieve financial freedom, it’s time to take action! The sooner you start enforcing these disciplines, the sooner you can enjoy the perks of being young and financially sound.
You’re already ahead of the game, so give yourself a pat on the back, and then get out there.