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Directbanc.com explores the topic of young adult finances in our Personal Finance Experts and their Personal Finance Blogs interview series. We would like to introduce LaTisha Styles, the head contributor at Financial Success for Young Adults. The site teaches saving, investing and budgeting basics from how to place a stock trade to how to get a free credit score. You can start now and build wealth! Get started at 9 Tips for Successful Investing.
1. What do you think are some of the biggest financial mistakes that people can make as young adults?
Mismanagement of credit and taking on too much student loan debt is probably one of the biggest mistakes that young adults make today. It really puts you behind and at a disadvantage once you have graduated. I would suggest scholarships, grants and working while in college to minimize your student loan burden.
While I do think it is important to open at least one line of credit when you turn 18, resist the temptation to use that line of credit. Set it up for one of your monthly bills, maybe a cell phone bill. Then pay it off each month. You will build a credit history and a positive one at that.
2. It’s common for recent college graduates who are searching for degree related employment to feel overwhelmed in starting their job search. Could you provide five steps they can take to increase their chances of success?
Step 1: Think about what you want to do before you graduate and get experience in that field. Take an unpaid internship if you have to. Create a student club if you have to. Get experience!
Step 2: Make friends with professors and your department dean. Stay in contact with them. Make sure they know you are looking and what you are looking for. Part of the responsibility of your college is to help you get a job after graduating. It’s one of the best ways they can advertise that they are a good school.
Step 3: Clean up your online footprint. Make sure your Facebook page is professional. Friends of friends can usually see most information so take down pics of you partying. Create a Linkedin profile and elaborate on what is summarized in your one page resume. Google yourself and see what comes up. Would you hire yourself?
Step 4: Go to industry events. FInd out what the professional organizations are in your field. Go to social events that they have. Talk to people. Ask them what they do. Engage. Exchange business cards. Follow up with an email saying it was nice to meet you. Make sure your email signature links to your professional social profiles.
Step 5: Don’t give up. I looked for almost a year after graduation before I got a job. I applied and applied and got turned down. I heard silence and I started to doubt my skills. But you will get a job if you make it a point to make connections and leverage your resources.
3. When young adults want to form a financial plan, what three items should they definitely have as part of their strategy?
You really only need 2 things, a budget and willpower. Start small. List your income. List what you want to spend money on. Make sure to put aside 10% to save. Then stick to it. Wealth comes steadily, never overnight.
4. How do you see the use of technology, especially personal finance management tools and phone apps, factoring into the finances of young adults?
Sometimes I think apps make things more complicated. Sometimes they make things easier. It really depends on how you use that technology.
5. For the twenty-something crowd, what types of retirement savings plans exist, outside of the 401K they might have through their workplace?
Check out a Roth IRA. Because you are young, you are probably paying very little in taxes. A Roth IRA is funded with after tax money. When you retire you get to take all of that money out and any gains without paying taxes. That’s because you’ve already paid taxes when you first put the money in. I think it’s a great way for young people to start saving for retirement.
6. There are many books and financial products available for purchase, but can you recommend some free resources that are helpful to young adults interested in learning more about personal finance?
I’ve heard of a website called Financial Success for Young Adults that has free information on personal finance.
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