5 Things I’m Doing At 22 To Better Secure My Financial Future
1. Contributing to an IRA.
I can’t exactly contribute a ton to it right now, because I don’t have a lot of ~extra~ income, but I do put $75 in the account each month, and the recurring payment is taken directly from my checking, so I don’t even have to think about actively saving. I know that, eventually, I’ll be able to save a lot more and put it towards the far-future, but for now, just knowing I’m putting some small amount away is comforting to me. It isn’t so much that I’m ever worried about making the payment, but it is enough that I know it’ll add up to something someday.
2. Paying student loans before they go into repayment.
When I took a year off from school, my loans went into repayment right away. I’m lucky to not have too many loans (I commute to a public university, so the in-state tuition is pretty manageable), but I do have a few from my first two years where I wasn’t as smart about the money side of it all. During my year off, I had a (pretty low) monthly payment of $120. After I went back to school, I got an email that I was no longer required to make payments until I graduated. However, I decided to keep paying it off so I could pay less interest and get it paid off more quickly. I’m going to have them fully paid off so soon after I graduate, and I’m really happy it has turned out that way.
3. Charging things I don’t need to charge to build credit, and keep track of spending.
For me, this usually means getting all of my gas with the credit card, since it is an expense I budget for regularly (obviously — it is how I get places). I don’t need to charge my gas — I wouldn’t exactly feel like I’m in a great financial position if I needed to — but doing this with expenses that are budgeted for, and that I have enough money in my account to pay off right away, means that I’m building credit (and accumulating credit card rewards points!).
An added bonus of charging smaller expenses (even when I have the money to pay for them) is that my billing statement automatically tracks my spending, so I can look at it each month and check to see where I spent the most, and what bad spending patterns I have that I should cut out. (That being said, I will say that going all-cash has benefits, so I don’t believe using credit 100% of the time is the best option. I’m so set in my credit-card-reward-point-hoarding ways that I haven’t truly tried to go cash-only, but there is definitely something to not having the ability to swipe a card whenever you want something.)
4. Putting all regular bill payments through my credit card.
To follow point three, putting my school bills/student loan payments, and regular monthly bills (like my car payment) through my credit card means that a) they’re always automatically paid on time, and b) I’m accumulating even more points on the card without using it for frivolous purchases. I know we talk about this all the time on TFD, but I cannot stress how much this simple thing helps me.
Example: I’m nearly finished with my Christmas shopping, and I haven’t spent an actual cent of my own money yet because I bought so many gifts with rewards points I’ve saved up. This holiday season could have been ten times more financially stressful if I hadn’t put all my bills through my card and hoarded all of those points all year — but I did it specifically knowing that I would be in a tight financial spot come November, and wanted to make sure I could get nice gifts for everyone in my life without stretching my wallet too much.
5. Living out of the moment.
It isn’t fun or romantic to plan hard for the future. I can’t even tell you how many friends and past boyfriends of mine, when confronted with big money questions, responded with some variation of “I try not to think about that — I’d rather live in the moment and enjoy today instead of worrying so much about the future.” It is a nice idea, in theory — but the thing is, the future becomes the present pretty damn quickly, and if you’re not well-prepared for it, you’re never going to have a fun or comfortable present.
I don’t allow my entire world to revolve around saving, or planning for retirement, or thinking about a future career — of course, those are all just part of my life, not my sole obsession and focus. But thinking about that stuff — knowing what I want, and taking small steps daily towards it — allows me to enjoy today, while ensuring I’ll have a better tomorrow, too.
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