Yikes! Am I really an adult? Starting to do all the things that my parents do hits really hits home. It’s a bit intimidating and yet exciting. How do I begin to manage my financial life? The decisions I make today can impact my future trajectory. So much responsibility since making the right financial decision now is critical.
Better Money Decisions wants to help so we have designed the Money Decisions Project to guide you through making the right financial decisions. Whether finding out how to pay for college loans, financing a car, moving away from home, establishing credit or paying off debt, The Money Decisions Project will be there to help you make these decisions.
What’s a budget?
You’ve been living in a dorm or still at home. Paying for everything has been easy. After all, need more money just ask Mom or Dad (One or the other usually says yes!) But now you decide to move out on your own. Where to begin? How much can I spend on an apartment? Can I buy a new car? They said my salary is $45,000 per year but my paycheck is only $2,900 per month! Where did the money go?
Figuring out how much everything will cost is a difficult process. Just getting started? Here are some of the Best Money Management Apps.
How do I begin to pay off my student loans?
It’s a huge burden and you can hope the federal government will offer some help but don’t hold your breath! Student loans can’t be discharged even in bankruptcy. The faster you can pay off your loans the better. Rule number one is: Don’t ignore them! Penalties accrue quickly and interest compounds.
Here’s good advice for Understanding Student Loans.
Should I invest in the 401K my employer offers?
If your company offers a matching contribution the answer is a definite Yes! That’s free money. The sooner you start saving for retirement the better (I know it’s hard to think about when you are just starting out)! The longer the money has to grow the less you have to invest to reach a savings goal. Here’s an example: A 25 year old invests $5000 per year between the ages 25 and 35 for a total of $50,000 and a 35 year old invests $5000 every year between the ages of 35 and 65 for a total of $150,000. Who has more at age 65? The 25 year old who invested for only 10 years. That’s the power of compounding. At a 7% return the 25 year old will have $1,142,811 and the 35 year old will have $602.070 only about half of the amount.
Need more information? Check out this article 401K: Starting to Invest.
How much should I spend on a car?
You’ve dreamed about buying a new car for so many reasons and after all, you need transportation to get to and from your new job. But don’t new cars depreciate (lose money) as soon as you drive them off the car lot? It’s a tough decision. How important is the type of car you drive? This is where the concept of choosing your luxuries comes into play. Unless you make well into the six figures, you need to decide what is important to you. Most will advise you to buy a used junk or take a “hand me down” car from your parents or relative but how will that make you feel? Some GENY’s will sacrifice a nice apartment for the car of their dreams. The choice is yours.
How much can I afford to spend on a car? Look at this Car Loan Calculator.
Those tempting Credit Cards!
They make it so easy! The offers come in the mail weekly offering such tempting benefits: free airline tickets, cash back rewards, hotel points, t-shirts. But what a treacherous lure! Your financial life can be devastated if your credit score ranking is low. The fact is that it’s much easier to over spend by using plastic and easy to accumulate debt that will take years to repay. The lower your credit score the higher the interest rate you will be charged by credit card companies, car loans and home mortgages. Take care and beware! Your financial future depends on it.
Do you still feel you need help in making these and other money decisions? Whether finding out how to pay for college loans, financing a car, moving away from home, establishing credit, paying off debt, or planning a wedding the Money Decisions Project is there to help you make these decisions. Click here to find out more about the Money Decisions Project.
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