If you haven’t already done so, you should also create a file for your important documents, including your birth certificate and social security card. You’ll need your social security number to apply for a loan, and it’s a good idea to keep these documents in an easy-to-refer-to file so you don’t have to search for them when something important comes up.
To budget your money, you can try to follow the 50/30/20 rule. Up to 50% of your income can go to needs, 30% can go to wants, and 20% should go to savings and debt repayment. If you can stick to this plan, you’ll be on your way to financial stability in no time! The traditional way to deal with expenses is to keep track of them by physically writing out your income and expenses, keeping a running tally of where you stand. However, financial software has made it easier than ever to take care of this in a more efficient and youth-friendly way.
Financial Software
Thankfully, financial software takes all the guesswork out of your personal finances and allows you to meet your long-term financial goals. The personal finance software mentioned below is a mix of free and paid options that can help you budget, build financially healthy habits, file income taxes, and manage spreadsheets. Mint, Quicken, Mvelopes, TurboTax, YNAB, and Tiller Money are great options for you to look over. Choose the ones that are right for you!
Many of the paid options also offer free trials, so don’t be afraid to give them a test run before you go through with your purchase. They might be the help with finances that you’ve been looking for.
Mint
Mint’s budgeting software is provided by the makers of TurboTax, making it a great choice for people who are already using it for their income taxes. This easy-to-use tool can be used to read your bank and credit card information and analyze your spending habits. You can also set up due date and low balance alerts so you’re never caught off guard by overdraft fees or late payments. Budget categories allow you to get information on how much money you have left for things like gas money or grocery spending. Mint is free to download on iOS, Android, and desktop devices.
Quicken
Quicken is probably the most well-known personal finance software to date. It allows you to create a budget, track your spending, and create savings goals. Interested in investing? Quicken can provide tips on how to invest your money, too. Quicken has Excel exporting capabilities that allow you to perform additional data analysis. It also has a bill pay feature that lets you pay bills from the software.
Quicken is robust enough to manage personal and business expenses. Quicken software starts at $35.99 a year for a starter membership. Home & Business membership is the most expensive option, at $103.99 a year. Keep an eye out for discounts; at the time this was written, there was a 40% off sale going on!
TurboTax
Although TurboTax isn’t budgeting software, it does a lot to ensure that your taxes are properly prepared and submitted to the IRS. You can import your W-2 from your employer or take a picture of it and upload it to the system. As you send income tax information, the software remembers and can be a lifesaver if you’re in the process of applying for a loan and aren’t sure where you put your tax return information. Simply log back in and find it again! Another advantage of using TurboTax for multiple years is that the software remembers your personal information, so you don’t have to enter it each year. If there haven’t been any major changes, information such as your address, name, marital status, and social security number will already be filled in for you. The basic version allows you to file your federal and state return for free if you only use Form 1040 and no attached schedules.
If you’re willing to pay more, however, TurboTax will give you access to a CPA to give personalized advice and answer questions. You can also get Audit Defense, which gives you access to a team that will handle all communications and negotiations with the IRS in the event that you’re audited.
YNAB (You Need A Budget)
You Need a Budget’s software helps improve your financial literacy and build healthy habits as you manage your budget. The software provides tutorials to help you understand difficult financial topics. YNAB can help you break your bad spending habits and get you on a better path. It automatically links to your bank account and provides you with spending analysis and budget tracking. The full software is $11.99 a month or $84 for a year.
Tiller Money
If you want to see all your money in one place, Tiller Money might be the right software for you. It automatically updates your checking, loan, credit card, and other account data into customizable Google or Excel spreadsheets. You can choose from several templates that will allow you to organize your data, or customize one to better suit your needs. Tiller sends daily emails with a summary of recent transactions and balances, too. Tiller costs $6.58 a month or $79 for the year.
Free Annual Credit Reports
You may not be aware of this, but you can access your annual credit report through the website AnnualCreditReport.com. This website allows you to see where you stand with the three major credit bureaus, which is important if you’d like to build your credit. The federal law allows you to get a free copy of your credit report every 12 months from the three major credit reporting companies.
Why should you check your credit report?
The first reason to check your annual credit report is that you’ll know where your credit stands. If you’ve messed up your credit by making mistakes, the first step to building it back up is to begin monitoring it. However, there’s another important reason to check your credit report annually: to avoid being scammed. Credit is a hot commodity for identity thieves, and the first place those changes will show up is on your credit report. If you review them often, you’ll be less likely to be blindsided.
A little-known fact is that banks aren’t required to pay the full amount that you lose from identity theft or credit card fraud if you don’t act quickly enough. You must act quickly if you wish to regain all of the income you lost. Reviewing your annual credit report is a great way to do this.
How to Build a Positive Credit History
The first step to building a credit history is to open an account. Many people believe a good way to acquire a credit card is to first open a bank account, then request your first credit card through them. Since it can be tough to find a credit card if you don’t already have credit established (or if your credit is bad), going to a financial institution that is already familiar with you may help. Even in the financial sector, it’s about who you know, so if you’re already established somewhere, that bank should be your first stop in building your credit.
(If you aren’t able to find a credit card through those means, try getting a secured credit card. It works much like a regular credit card but requires a security deposit upfront, which the institution will hold as collateral against what you spend. If you stop making payments, the issuer will keep the deposit to cover the debt.)
Once you’ve got your credit card, begin making small, easy-to-afford purchases on it. Pay your balance in full each month so that you will have a history of on-time payments. Doing this will build your credit score over time and show that you’re a responsible borrower.
Of course, that’s not the only way to build a positive credit history. If you’ve got a car loan or student loan, making on-time payments on those can also bolster your credit. Just check into the methods of building credit linked above for more information!
Planning for the Future
A lot goes into planning for the future, but the major purchases that may still be ahead of you are buying a car, buying a home, and putting some money toward a retirement home so you can live comfortably. Below, I’ll provide a summary of each of these purchases, along with some tips to make the process easier for you.
Buying a Car
A common misconception is that buying a car is a relatively painless process. Some customers expect to walk up, choose their car, sign some paperwork and get the keys. They’re taken aback when they realize that they may need to wait for a few hours while the dealership runs their credit to determine what loans they can be approved for.
To avoid this, you can get preapproved for a loan before you even walk into the dealership. This will guarantee that you get a loan for an amount you can afford and give you the chance to secure the best rate possible. Rather than being rushed and signing all the paperwork coming your way, you can take your time to determine what interest rates are best for you. Be careful what lender you use, though: use a mainstream bank, credit union, or another lender whose name you recognize.
Start with the price of the car you want. The salesperson may try to ask if you’ve got a trade-in, but politely decline until you have a solid answer on how much it will cost. From there, state whether you’ve got a trade-in and ensure that you’ve already researched the trade-in value online. Remember: you can always walk away or refuse the trade-in offer if you feel they’re lowballing you. There are other great car buying tips available at the link if you’d like to know more.
Buying a Home
Buying a home is an exciting prospect, but you’ll want to be sure you’re absolutely ready. You’ll need to be ready both financially and emotionally, since it’s a large investment that will be far more lucrative if you plan to stay in the home for some time. Not only will you need to afford the monthly payment, but traditionally, you’ll want to have up to 20% of the purchase price for the down payment as well as 2-5% of the loan amount for closing costs.
However, many lenders have first-time homebuyer programs that will lend up to 97% of the purchase price. It’s preferable to have an emergency fund too, just in case you need to make unexpected repairs.
(Homebuying tip: if you find that the home needs repairs, it may be tempting to ask the seller to make the repairs before you move in. However, many sellers are eager to move out and make the bare minimum of repairs. If you can negotiate a lower asking price in lieu of those repairs and then get a licensed contractor to perform repairs for you, you’ll have a higher chance of the repairs being done in the way you want them to be done.)
See this home-buying checklist if you’d like more information on how to purchase a home.
Retirement Fund
Although saving for retirement is likely the last thing you’re thinking about right now, it can be much easier for you if you start right now. Merrill has a helpful chart that shows how much more money you could have for retirement if you start now rather than waiting until you’re 35. You should also consider contributing to a 401(k) or IRA since those can help build your retirement fund.
There are plenty of other tips on how to save for retirement linked above.
How Can Stewart Publishing Assist You?
I write blogs like this one because helping people is where I thrive. I’ve written on topics ranging from elder care, working from home and, most recently, the transition from teenager to young adult. I’ve also written books about leaving your parent’s home and the nature of power struggles. Let me know if you’ve enjoyed this article on young adults’ finances, or if you’ve got any questions. If you are not a subscriber, then click the link and sign up today, https://forms.aweber.com/form/43/1356852343.htm As always, I’d like to hear from you.
If you’re a teenager or young adult who would like to create a financial base for yourself, this article is for you. I’ll cover everything, including how to get started, what financial software is available to you, and how to take advantage of your free annual credit reports. I’ll also go over how to build a good credit history and plan for the future by saving for a car, a house, and a retirement fund. Read on to find out more about how to build up your income and create a financial base.
Getting Started
Before you can begin creating a financial base for yourself, you’ve got to find out what you’re working with. To do this, you’ll need to know what your monthly income and expenses are. Gather up your pay stubs, loan statements, utility bills, and anything else you may need in order to know where you stand financially. (Or, alternatively, find your e-bills and e-statements online.) You’re going to need this information for the next step.
If you haven’t already done so, you should also create a file for your important documents, including your birth certificate and social security card. You’ll need your social security number to apply for a loan, and it’s a good idea to keep these documents in an easy-to-refer-to file so you don’t have to search for them when something important comes up.
To budget your money, you can try to follow the 50/30/20 rule. Up to 50% of your income can go to needs, 30% can go to wants, and 20% should go to savings and debt repayment. If you can stick to this plan, you’ll be on your way to financial stability in no time! The traditional way to deal with expenses is to keep track of them by physically writing out your income and expenses, keeping a running tally of where you stand. However, financial software has made it easier than ever to take care of this in a more efficient and youth-friendly way.
Financial Software
Thankfully, financial software takes all the guesswork out of your personal finances and allows you to meet your long-term financial goals. The personal finance software mentioned below is a mix of free and paid options that can help you budget, build financially healthy habits, file income taxes, and manage spreadsheets. Mint, Quicken, Mvelopes, TurboTax, YNAB, and Tiller Money are great options for you to look over. Choose the ones that are right for you!
Many of the paid options also offer free trials, so don’t be afraid to give them a test run before you go through with your purchase. They might be the help with finances that you’ve been looking for.
Mint
Mint’s budgeting software is provided by the makers of TurboTax, making it a great choice for people who are already using it for their income taxes. This easy-to-use tool can be used to read your bank and credit card information and analyze your spending habits. You can also set up due date and low balance alerts so you’re never caught off guard by overdraft fees or late payments. Budget categories allow you to get information on how much money you have left for things like gas money or grocery spending. Mint is free to download on iOS, Android, and desktop devices.
Quicken
Quicken is probably the most well-known personal finance software to date. It allows you to create a budget, track your spending, and create savings goals. Interested in investing? Quicken can provide tips on how to invest your money, too. Quicken has Excel exporting capabilities that allow you to perform additional data analysis. It also has a bill pay feature that lets you pay bills from the software.
Quicken is robust enough to manage personal and business expenses. Quicken software starts at $35.99 a year for a starter membership. Home & Business membership is the most expensive option, at $103.99 a year. Keep an eye out for discounts; at the time this was written, there was a 40% off sale going on!
TurboTax
Although TurboTax isn’t budgeting software, it does a lot to ensure that your taxes are properly prepared and submitted to the IRS. You can import your W-2 from your employer or take a picture of it and upload it to the system. As you send income tax information, the software remembers and can be a lifesaver if you’re in the process of applying for a loan and aren’t sure where you put your tax return information. Simply log back in and find it again! Another advantage of using TurboTax for multiple years is that the software remembers your personal information, so you don’t have to enter it each year. If there haven’t been any major changes, information such as your address, name, marital status, and social security number will already be filled in for you. The basic version allows you to file your federal and state return for free if you only use Form 1040 and no attached schedules.
If you’re willing to pay more, however, TurboTax will give you access to a CPA to give personalized advice and answer questions. You can also get Audit Defense, which gives you access to a team that will handle all communications and negotiations with the IRS in the event that you’re audited.
YNAB (You Need A Budget)
You Need a Budget’s software helps improve your financial literacy and build healthy habits as you manage your budget. The software provides tutorials to help you understand difficult financial topics. YNAB can help you break your bad spending habits and get you on a better path. It automatically links to your bank account and provides you with spending analysis and budget tracking. The full software is $11.99 a month or $84 for a year.
Tiller Money
If you want to see all your money in one place, Tiller Money might be the right software for you. It automatically updates your checking, loan, credit card, and other account data into customizable Google or Excel spreadsheets. You can choose from several templates that will allow you to organize your data, or customize one to better suit your needs. Tiller sends daily emails with a summary of recent transactions and balances, too. Tiller costs $6.58 a month or $79 for the year.
Free Annual Credit Reports
You may not be aware of this, but you can access your annual credit report through the website AnnualCreditReport.com. This website allows you to see where you stand with the three major credit bureaus, which is important if you’d like to build your credit. The federal law allows you to get a free copy of your credit report every 12 months from the three major credit reporting companies.
Why should you check your credit report?
The first reason to check your annual credit report is that you’ll know where your credit stands. If you’ve messed up your credit by making mistakes, the first step to building it back up is to begin monitoring it. However, there’s another important reason to check your credit report annually: to avoid being scammed. Credit is a hot commodity for identity thieves, and the first place those changes will show up is on your credit report. If you review them often, you’ll be less likely to be blindsided.
A little-known fact is that banks aren’t required to pay the full amount that you lose from identity theft or credit card fraud if you don’t act quickly enough. You must act quickly if you wish to regain all of the income you lost. Reviewing your annual credit report is a great way to do this.
How to Build a Positive Credit History
The first step to building a credit history is to open an account. Many people believe a good way to acquire a credit card is to first open a bank account, then request your first credit card through them. Since it can be tough to find a credit card if you don’t already have credit established (or if your credit is bad), going to a financial institution that is already familiar with you may help. Even in the financial sector, it’s about who you know, so if you’re already established somewhere, that bank should be your first stop in building your credit.
(If you aren’t able to find a credit card through those means, try getting a secured credit card. It works much like a regular credit card but requires a security deposit upfront, which the institution will hold as collateral against what you spend. If you stop making payments, the issuer will keep the deposit to cover the debt.)
Once you’ve got your credit card, begin making small, easy-to-afford purchases on it. Pay your balance in full each month so that you will have a history of on-time payments. Doing this will build your credit score over time and show that you’re a responsible borrower.
Of course, that’s not the only way to build a positive credit history. If you’ve got a car loan or student loan, making on-time payments on those can also bolster your credit. Just check into the methods of building credit linked above for more information!
Planning for the Future
A lot goes into planning for the future, but the major purchases that may still be ahead of you are buying a car, buying a home, and putting some money toward a retirement home so you can live comfortably. Below, I’ll provide a summary of each of these purchases, along with some tips to make the process easier for you.
Buying a Car
A common misconception is that buying a car is a relatively painless process. Some customers expect to walk up, choose their car, sign some paperwork and get the keys. They’re taken aback when they realize that they may need to wait for a few hours while the dealership runs their credit to determine what loans they can be approved for.
To avoid this, you can get preapproved for a loan before you even walk into the dealership. This will guarantee that you get a loan for an amount you can afford and give you the chance to secure the best rate possible. Rather than being rushed and signing all the paperwork coming your way, you can take your time to determine what interest rates are best for you. Be careful what lender you use, though: use a mainstream bank, credit union, or another lender whose name you recognize.
Start with the price of the car you want. The salesperson may try to ask if you’ve got a trade-in, but politely decline until you have a solid answer on how much it will cost. From there, state whether you’ve got a trade-in and ensure that you’ve already researched the trade-in value online. Remember: you can always walk away or refuse the trade-in offer if you feel they’re lowballing you. There are other great car buying tips available at the link if you’d like to know more.
Buying a Home
Buying a home is an exciting prospect, but you’ll want to be sure you’re absolutely ready. You’ll need to be ready both financially and emotionally, since it’s a large investment that will be far more lucrative if you plan to stay in the home for some time. Not only will you need to afford the monthly payment, but traditionally, you’ll want to have up to 20% of the purchase price for the down payment as well as 2-5% of the loan amount for closing costs.
However, many lenders have first-time homebuyer programs that will lend up to 97% of the purchase price. It’s preferable to have an emergency fund too, just in case you need to make unexpected repairs.
(Homebuying tip: if you find that the home needs repairs, it may be tempting to ask the seller to make the repairs before you move in. However, many sellers are eager to move out and make the bare minimum of repairs. If you can negotiate a lower asking price in lieu of those repairs and then get a licensed contractor to perform repairs for you, you’ll have a higher chance of the repairs being done in the way you want them to be done.)
See this home-buying checklist if you’d like more information on how to purchase a home.
Retirement Fund
Although saving for retirement is likely the last thing you’re thinking about right now, it can be much easier for you if you start right now. Merrill has a helpful chart that shows how much more money you could have for retirement if you start now rather than waiting until you’re 35. You should also consider contributing to a 401(k) or IRA since those can help build your retirement fund.
There are plenty of other tips on how to save for retirement linked above.
How Can Stewart Publishing Assist You?
I write blogs like this one because helping people is where I thrive. I’ve written on topics ranging from elder care, working from home and, most recently, the transition from teenager to young adult. I’ve also written books about leaving your parent’s home and the nature of power struggles. Let me know if you’ve enjoyed this article on young adults’ finances, or if you’ve got any questions. If you are not a subscriber, then click the link and sign up today, https://forms.aweber.com/form/43/1356852343.htm As always, I’d like to hear from you.
