1. Pay Off Your Debt With The Highest Interest Rate First
It's time to take a close look at your outstanding debts and their corresponding interest rates. If one loan has a rate of 5% and another has a rate of 9%, the latter will end up costing you significantly more in interest. If you have room in your budget to put extra money towards the principal, do this for your higher-interest loans. Getting these paid off sooner than later will save you a great deal of money in the long run.
2. Go Easy On Your Credit Card
Credit cards make it incredibly convenient (and tempting) to spend large amounts of money. However, that $500 television you couldn't afford to buy with cash will get even more expensive when you tack on your credit card company's interest rates and possibly additional late fees. Using a credit card can be a great way to build up your credit rating, but it's critical that you use it wisely. We recommend treating your cards like cash - only use it to purchase things you could just as easily afford to buy with cash or a check.
3. Look Carefully At Your Chosen Partner's Spending Habits
Many people choose their life partners in early adulthood. This is healthy and normal, but we recommend that you evaluate your chosen partner's financial habits before you say "I do." Once you become married, your credit score and overall financial situation will be significantly affected by your partner's.
Be honest with each other about your financial values and priorities so you can devise a strategy that will work for both of you.
4. Begin Saving For Retirement With Your Very First Job
With so many other financial obligations, setting aside money for retirement is the last thing on many millennials' minds. However, our finance experts in Missouri strongly believe that the early twenties is actually the best possible time to begin saving for retirement. By starting early, you allow compound interest the time it needs to drastically increase your wealth. (See our blog about the power of compound interest.)
5. Save At Least 20-30% Of Every Paycheck
While putting a significant portion of your paycheck into your savings account may seem challenging, it is absolutely critical - especially during this transitional time. However, building up a savings account is the only way to weather life's inevitable difficulties, such as unexpected repairs or layoffs. Saving extra money upfront may mean skipping a dinner out here and there, but it will be well worth it if something happens.
Set Up Your Savings Account At First Bank Of The Lake!
If you are in need of a new financial resource at the Lake of the Ozarks, we hope you'll consider our bank in Osage Beach MO. We offer plenty of checking and savings accounts options to help you manage your finances easily and effectively. Visit our website to learn more!
First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.
Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Osage Beach, MO 65065