Financial Skills For Young Adults
July 27, 2022 | View PDF
Beginning an independent financial journey may be challenging and mistakes can be costly. Financial skills are learned over time, and it’s okay if you make mistakes along the way. However, not every financial lesson we learn needs to be the hard way. The article written by Take Charge America Team titled 7 Essential Financial Skills for Young Adults have provided seven skills to know as a young adult starting out on your financial journey.
1. Basic Budgeting: knowing how to plan and stick to your budget is a key foundational skill to help your financial journey regardless of age. A budget is keeping track of money coming in and going out (where the money goes to, food, gas, etc.). There are many ways to keep track of your budget; what is important is finding a way that works for you.
2. Bank Account Basics: learning the basics about your bank accounts can give you a leg up on your financial journey. From minimum balances required, what overdrawing means, overdraft fees, and access to your account are important items to know.
3. Understanding Wants vs. Needs: needs are the items you need for your daily life, such as food, paying bills, etc. Where your wants are items that you might not need, and if money is tight, they might be something that needs to wait.
4. The Importance of Saving for Emergencies: what is essential to understand about saving for emergencies is that having money set aside for emergencies (job loss, major car repairs, medical bills, etc.) can help you out if you find yourself in a financial crisis.
5. How to Develop a Positive Credit History: as a young adult, it is important to consider your future, and your credit can play into that. Getting too deep into credit card debt can affect your financial future. Remember to pay your bills and make sure they are paid on time.
6. Understanding Nothing is Guaranteed: this can be a hard lesson to learn at any age, but it is important to prepare yourself for the time your roommate does not pay their part of the rent or for job loss. Preparing for when these things happen can lessen the impact when they happen.
7. Knowing When to Ask for Help: it is important to understand that we all make mistakes, and some are bigger than others. It is okay to ask for help to get you back on track.
These skills are not all-inclusive to everything regarding finances; however, they do provide a general guideline to help you get started on your financial journey. To read this article and explore their suggested resources, it can be found at: https://www.takechargeamerica.org/7-essential-financial-skills-for-young-adults/.
For additional financial resources or estate planning information, contact Carrie Krug at the MSU Extension office at 406-433-1206.