Start Saving
Starting to save early in life will pay off greatly, especially because all the interest you’ll earn means you’ll have to contribute significantly less. Even if you’re next to broke, be sure to contribute at least enough to your retirement account to get any matching contributions your employer is providing you. Otherwise, you’re leaving free money on the table. A Roth IRA can also be a good place to save for retirement while keeping the money available for emergencies. That’s because the sum of your contributions can be withdrawn tax and penalty-free at any time, for any purpose.
Live on a Budget and Get Out of Debt
While graduating from college and landing a new job are a great time to start saving money, this may not be possible for those with loads of debt. Now is not the time to start living large; put off buying a new car, and keep living on a starving student budget (with room mates). Once you start living a more luxurious lifestyle, it will be hard to go back. Track your expenses and spending with apps like those from Mint.com, and you’ll help keep yourself on track.
You may also consider reducing your student loan debt through public service, thanks to the Public Service Loan Forgiveness Program. If you enter a field dedicated to public service (including the Peace Corps or Americorps) for ten years and make 120 on-time monthly payments, you may be able to have the outstanding balance of your principal and interest payments forgiven. Perkins loan balances can be reduced by 70 percent for two years of Peace Corps service and 100 percent for military service. Also take advantage of tax breaks on moving costs, job hunting costs, and student loan tax deductions.
Mind Your Credit
Your credit score can rule your ability to get a mortgage, a car loan, and even a job. Make sure you make loan payments on time, and don’t use more than 30-50 percent of any given available credit line. Also avoid closing your oldest credit card, since that will shorten your credit history–another crucial component of your score. Get your credit score and a credit report card (yes, there are still report cards after college) for free from websites like AnnualCreditReport.com.
Get Health Insurance
Young adults (between ages 19 and 29) have the highest rate of uninsurance among any age group. In 2008, they accounted for 30 percent of uninsured Americans under age 65, despite making up less than 20 percent of the under-65 population. Despite being young, this is bad news for young adults; a report by The Commonwealth Fund — which surveyed 19- to 29-year-olds in 2009 — found that more than 75 percent of those without insurance don’t get needed medical care because of the cost. Yikes. Of those who did seek care but were uninsured, about 60 percent reported difficulty paying medical bills, and an estimated 11.3 million were paying off debts to the doc. Of those, half had turned to parents or other family members for help, nearly a third were forced to put off education or career plans, and 39 percent were unable to meet other debt obligations, like paying off school loans. If you are under 26, and do not have access to health insurance through your employer, try to remain on your parents’ health insurance plan if possible.
