One criticism that is often heaped onto our education system is that children are not provided enough financial advice. While they might be taught how to perform advanced mathematical queries, or learn a foreign language, some have suggested that when it comes to real-world financial problems – little advice is made available.
Unfortunately, this is the time of life where problems can occur. A lack of experience with money can cause all sorts of basic errors – ones that might not occur later down the line when “life’s lessons” have occurred.
It’s for this reason that some families will even ask their own financial advisor to help the younger adults in their family. It’s not unheard of for high-end financial advisors, like Adam Rosenfeld Miami, to sit down with a young member of a client’s family and just issue basic financial advice.
Of course, there are plenty of people who might not have such an option. This is one of the reasons we have devised his page, as we take a look at some of the best pieces of financial advice that a young person should take into account.
Understand tax law
In the bubble of being a child, we’re not really subjected to tax and the implications that it will have on us in adult life. Unfortunately, this will continue occur right the way through to us getting our first job.
In other words, most people don’t understand about “take home” money. If you are offered a job at a starting salary, you need to be aware that this isn’t the figure that will be hitting your bank account. This can be crucial; it’s not been unheard of for a young adult to relocate on a starting salary that should have covered their expenses, only to realize that in actual fact they won’t be receiving enough after taxes.
To put this into perspective, a $35,000 salary will actually turn out to be around $9,000 less after tax in New York – which is a significant difference.
Start thinking about retirement now
You might have only just left school, but retirement plans need to start decades in advance.
Fortunately, more and more companies are starting to provide retirement plans which sometimes result in them matching your monthly contribution. Regardless of how it works with your job role, make sure that you at least put provisions in place so that you will have sufficient finance put away when the time does come to stop working.
Emergencies happen to everyone
In the early days after taking a job, a lot of people will plod along completely fine. The problem is that most pay checks are sufficient until the last day of the month – before money runs out. In other words, there are no provisions if an emergency occurs.
While we don’t want to put a downer on things, emergencies do happen to everyone. Whether it’s a car that needs major repair work, or a heating system that needs replacing – make sure that you have an emergency fund that you can tap into if the worst case scenario does occur.