Rachel Cruze, Personal Finance Expert and #1 New York Times Best-Selling Author
Book: Smart Money Smart Kids
According to Rachel Cruze: Money advice for young adults
Make a monthly budget
A budget is simply a plan for your money.
It allows you to know where your money is going and helps you avoid overspending!
Create a zero-based budget every month, before the month begins.
Put it in writing and give yourself 90 days for your budget to work.
Understand the dangers of debt
Debt robs you of your income.
Stay away from credit cards – no amount of points will help you win financially!
Don’t go into debt for a new car or large purchases.
Get serious about paying off current debt quickly.
Use the Debt Snowball: List all debts smallest to largest payoff balance and start with the smallest debt.
Make saving a priority
There are 3 main things to save for: emergencies, large purchases and retirement.
Emergencies: An emergency fund will provide a solid foundation and allow you to avoid debt.
Start with $1,000. Once you’re debt-free increase to 3-6 months of expenses.
Large purchases: Instead of going into debt for vacations or cars, save up cash.
Retirement: Compound interest is your friend – once you’ve paid off debt, start saving for your future!
Learn to say “no”
Consider how the decisions you make now will affect the rest of your life.
Remember you’re in 20s, not your 50s.
Be patient – don’t buy the latest and greatest if you don’t have the money!}
Handling money properly now will set you up for long-term financial success.