Each month I host a networking lunch where some of Denver’s leading women in business gather to discuss various topics that have helped them on their path to success. As graduation season approaches for many young adults, we recently discussed the financial advice passed down to us from our parents as we entered adulthood.
Financial literacy is important and meaningful knowledge that can have a lasting impact for years down the road. Everyone should start with a foundation for financial success, including a basic understanding of budgeting, saving and investing.
Here are some tips for those just starting out on their financial path:
Live within your means
Learning how to budget and live within your means is extremely important for financial health. Know what lifestyle you can afford and even so, evaluate whether you really need that high-end apartment or luxury car. Even a daily habit of $5 lattes can add up quickly. These days, there are countless free budgeting apps that can help you work towards your savings goals and calculate how much you can spend each day.
Start investing early
Don’t just save, invest. Many can be intimidated and anxious about investing. Educate yourself about how to invest whether through a course online or a trusted advisor, and learn about the rewards of compound interest. If you are unsure, start slowly and invest small amounts.
Just like your physical health, you should monitor your financial health. Even if you live with a partner who takes care of most money matters, you should be fully aware of and involved in your finances. Money discussions can sometimes be uncomfortable, but it is important to keep communication open with those you share finances with, especially when planning for the future.
Pay loans in a timely manner and try to reduce debt
Debt can be a burdensome ball and chain. The average graduate in 2016 had $37,172 in student loan debt. Be sure to make payments on time and pay more than the minimum when possible. Each day that passes results in more interest and debt. This goes for credit card payments, too.
Prepare for the unexpected
It is impossible to plan for unexpected circumstances, but you can be prepared. Life always throws curveballs – such as an unexpected job loss or injury. Prioritize building a savings cushion into your broader budget and financial plan. This will allow you to manage difficult times without worrying as much about your finances.
Shelley Ford is a Financial Advisor with the Pelican Bay Group at Morgan Stanley in Denver. She can be reached at 303-572-4839 or Shelley.Ford@morganstanley.com.
The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.