By: Taylor Swanson

Young adulthood is one of the most exciting yet scariest times in our life. Let’s be honest, high school doesn’t prepare us for adulthood as much as we would like, and it can feel like reality slaps you in the face after you graduate, especially when it comes to finances. I’ll admit that in my early 20s, I had no clue what to do with my finances. Sure, I had a bank account, but I didn’t know how to go about getting a loan, how to build credit, or even what to do with my money to save for my future. Most of what I’ve learned, I learned through my time working here at Yolo Federal Credit Union for over five years. Since not everyone has the opportunity to learn money management best practices from where they work, I’ve put together my top 3 financial tips for my 20-something-year-olds.

Start Your Retirement Plan Now

You may be wondering why you need to plan for retirement now when you’re looking at 40+ years until you retire. The thing about retirement plans is that they need time to grow. They don’t just appear overnight. The money you put into your retirement plan needs to last you for the 20+ years you will be living after you retire. Do you want to travel when you retire? What about getting a cabin on the lake for the summer? Whatever you dream about doing when you retire, it’s going to cost you. If you have a retirement plan set up through your work, make sure you maximize your retirement plan contributions, especially at this stage in life, before you have significant expenses such as mortgages or children. If you’re in search of a retirement plan, speak with our CFS* Financial Advisor, Monaye Nelson-Morgan, at (858) 530-4495 or mmorgan@cusonet.com.

Create a Budget

Budgeting helps establish good financial habits, and starting early means you’ll maintain these good habits throughout your lifetime. There are two parts to a budget: income and expenses. The goal of a budget is to minimize your expenses to take home most of your income. You can do this by establishing your needs and wants. Your daily coffee from Starbucks is something you want, but the gas you purchase to get to and from work is something you need. Budgets are a living thing, which means that they are flexible and should allow you to have that cup of coffee every once in a while. Its main purpose is to stop you from overspending and helps you meet your financial goals.

Start Building Credit Early

Credit is necessary to have when you want to purchase a car or your first home. While you may be tempted to open up a Credit Card with your favorite retailer, you want to make sure that you read the fine print before doing so. Retailer Credit Cards often have high-interest rates and include annual fees. Yolo Federal’s Starter Visa® Classic Credit Card allows you to secure your funds against the card with a low, fixed interest rate and no annual fees. Because the card is secured by your funds, you do not need to have a credit history. This card is used like a regular Credit Card, where you “buy now, pay later,” and helps you build credit over time.

Why should you start building credit now? When I was a Financial Service Representative, I found that most young people realize that they do not have credit when they are in the process of applying for their first Auto Loan. They assumed having no credit is a good thing when in reality, it works against them. Having no credit history can sometimes mean they end up with higher interest on their Auto Loan or, in a worst-case scenario, they do not qualify for the loan at all. Starting early and using it responsibly is the key to building credit. Click here to learn more about our Visa Classic Credit Card.

While I dedicated this blog to my twenty-something-year-olds, truly anyone at any age could benefit from these financial tips. Even now that I am in my late 20s, I still use these tips to my advantage. It is never too early or too late to develop good financial habits. Adulting is hard, and trying to juggle all your new responsibilities can take a toll on you. Breathe a little easier in life by incorporating these top three financial tips into your money management best practices.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.