When you are a young adult, your personal finances may not be a major factor in your daily life. You might not spend much time thinking about your money situation. After all, you may still have help and support from your parents or just have more important things to think about. However, there are numerous financial steps you should take when you are still at a young age. Get to know some of these steps you should be taking. This will help you to improve your personal finances now and into the future.
Be Sure You Have a Checking and Savings Account
First and foremost, one of the financial steps you should take when you are a young adult is to get yourself a checking and savings account in your name only. You may have had a joint account with a parent growing up or the like, but you should have your very own account by the time you are a young adult, especially if you are earning your own money.
A checking account will be where you keep your spending money and the money you need to use for bills. If your parents still support you, they can easily transfer money directly into your checking account using ACH transfers or apps like Zelle rather than give you cash.
Your savings account will be where you stash money away for big purchases, a rainy day, or the future. You may think that you do not need a savings account and that you can just not spend money in your checking account and let it accumulate. However, this strategy usually does not work and that money gets spent rather than saved. Even if you can't save much money, starting a savings account early will benefit you in the long run.
Keep 20 Percent of Your Income in Your Savings Account
A good rule of thumb for life is to set aside 20 percent of your income a month for savings. This is a habit that is best to start early as building up substantial savings requires time and effort.
If you cannot set aside 20 percent, go for 10 percent or simply save as much as you can every month based on how much your bills and necessary expenses cost. However, the more you save, the better off you will be in the future when you are done with high school or higher education. By being prudent about your savings, you will put yourself in an ideal financial situation for the rest of your life and build a lifelong habit that can greatly benefit you.
Now that you know a few of the financial steps you should take at a young age, you can get started by heading to the bank and opening your accounts right away. Learn more by contacting banks like CommunityBank of Texas.