The best way to avoid repeating history is to learn from your own and others’ mistakes. This is especially true when it comes to money management. Online, there is a lot of financial advice available to the next generation. Here are six tips that everyone should follow, especially those just starting out.
1. Plan for the future. Deposit money into a Roth IRA or a workplace retirement account as soon as you start working and have the funds to do so. Ensure you get your company to match your contributions if they offer this perk.
2. Pay yourself first. Save a certain amount of every paycheck by depositing it into a savings account.
3. Live within your means. How well you manage what you make is key.
4. Know the difference between bad debt and good debt. Any debt that has a lower interest rate than what the money would gain if saved may be good debt. If the debt has a high interest rate, like with credit cards, it is bad debt. Be sure to pay off credit cards and use them sparingly.
5. Keep an eye on your credit score and credit report. It helps to check in at least once a year with each credit bureau to view your report to ensure there are no errors on it.
6. Be prepared for the unexpected. Set up a rainy day fund with savings you never touch unless an emergency occurs.