1. Upgrade your bank account
Bank accounts are more than just places to stash your dough until you spend it. As soon as you start making some money, the first thing you’ll want to do is put it to work for you.
And, look for a high-interest savings account that will grow your money faster and help you put aside funds to start reaching goals like traveling more or buying a car or your own place.
For impressive returns on savings accounts, online banks like Ally and Discover lead the pack. While more traditional banks offer just 0.01% annual interest on your savings, high-interest accounts from web-based banks can pay close to 2%.
Choose a checking account that won’t charge you for everyday ATM transactions or hit you with other ridiculous fees that take bites out of your hard-earned money.
2. Apply for a (new) credit card
You have hundreds of different credit cards to choose from– and some are better choices than others. You’re definitely missing out if you have a student card with a low credit limit or a card with no rewards or cash-back options.
When you buy gas or shop for groceries, you can find rewards credit cards that offer cash back. Other cards will help you earn free flights or hotel stays, or can save you money at your favorite store.
Using 30% or less of your available credit will make it easy to pay your balance and will show the credit agencies you’re not overextending yourself. This will translate to a healthy credit score and easier access to mortgages, car loans and other credit you’ll be needing.
Make sure to always pay your balance in full at the end of the month once you get a new credit card. You’ll be adding to your credit history– and helping the credit bureaus set your credit score because each time you use the card.
3. Invest in your future
Even a very modest investment can grow substantially over time. Financial advisers agree that the sooner you start investing, the better!
Don’t despair if you’re in your 30s and haven’t started investing! Now’s the time, and it’s easier than ever.
If you were to put aside $100 a month from age 20 until you’re 65, you ‘d save $54,000– and investing it at an average annual return of 7% would grow it to nearly $370,000. If you don’t start until you’re 40, you ‘d retire with just $81,000.
Automated investment services like Wealthsimple use computer algorithms to get you the best returns at your desired risk level.
4. Insure yourself
You’re not planning to leave this world anytime soon– but if something happens that shortens your schedule, you can save your family a lot of pain by having life insurance.
If you have no debt at all, have some insurance coverage through your job, or are not planning on owning a home or having kids, then you may not need to buy life insurance.
A life insurance payout could cover the rest of your payments so your family isn’t saddled with debt if you have outstanding private student loans. Or, when you own a home, insurance could cover your mortgage payments after you’re gone.
Buying insurance in your 20s or 30s is dirt cheap, and term life insurance for 10, 20 or 30 years is the best option for young people.
5. Make out a will
Everyone needs a will– even you. According to estate law experts, writing a will should be a prerequisite to graduating from high school!
Having a will ensures that your money and possessions are kept out of the court system and that your family or partner can access your life insurance money.
You can even will your money or belongings to your favorite nonprofit if you’re the charitable type. And– getting heavy here– you can leave directions on the lengths that should be taken to keep you alive.
With a will, you can give directions on how your social media accounts, finances and photos should be handled if you make an early exit. You can name a guardian for your pet and give instructions to sell certain possessions to cover expenses for your fur-baby.