Although retirement may seem light-years away for many young adults,
early planning and money management is important to achieving financial
freedom in the future. To help young adults take charge of their
financial life, MetLife has added a new workshop to its workplace-based
PlanSmart® Financial Education series, “Smart Money Moves in Your 20’s
and 30’s.” The workshop offers ten relevant and digestible financial
tips to young adults driving home the importance of proactive financial
planning.
The PlanSmart Financial Education series, launched in 2008, offers a
selection of workshops relevant to employees of varying ages and career
stages. The series fulfills employees’ interest in financial education
and planning help in the workplace and addresses a variety of topics
such as credit management, planning for college, estate and retirement
planning -- and now, financial planning, for employees that are just out
of school to ten or more years into their career.
“As the economy evolves, it’s more important than ever for young adults
to plan for their futures and understand the 'time value' of preparing
for their future,” said Jeff Tulloch, vice president, MetLife. “The
workshops offered through PlanSmart help individuals of all ages be
better positioned to meet their financial goals.”
10 Personal Finance Tips for Young Adults
1. Look at your paycheck: To plan accordingly, it’s important to
know exactly how much you take home every month after taxes and
deductions.
2. Create a budget: Now that you know your monthly income, set a
budget to keep an eye on your finances. This includes being honest about
knowing your “needs” versus “wants” and living within your means.
3. Know the “28/36 rule”: Allocate approximately 28 percent of
your monthly budget on housing (rent, mortgage) and keep total debt
costs (student loans, credit card payments, etc.) within 36 percent of
monthly income.
4. Save at least $50 a week because “stuff” happens: Because
things happen unexpectedly in your twenties, aim to set aside a minimum
of $50 per week. Save this money in an account that’s strictly for
emergencies.
5. Become a millionaire by age 65: Start saving and investing as
early as possible. As a younger person, time is on your side and even
the smallest money moves are beneficial thanks to the power of
compounding.
6. Sign up for your employer’s 401(K) or 403(b) plan and get the
match: If you have the opportunity to invest in a 401(k) or 403(b)
plan through your employer, RUN, do not walk, to sign up. Even small
amounts of money invested in your twenties can grow into significant
amounts.
7. Start a Roth IRA and contribute: A Roth IRA is an excellent
savings vehicle for many younger individuals who are able to save more.
There are many advantages to opening this kind of account, such as
accessing money without penalty before retirement.
8. Get insured: Although life insurance and disability insurance
may not be a top-of-mind concern, consider protecting yourself in the
case an unforeseen circumstance occurs. The general rule of thumb is to
secure 10 times your salary in life insurance and 65 to 85 percent of
your net pay in long-term disability insurance.
9. Aim for 760 or higher: This is the credit score you need to
qualify for the best interest rates on a new home or a car. Paying bills
on time and paying down debt will help you maintain a strong credit
score.
10. Develop distinct savings goals: Even if it’s a small one,
always have a savings goal in mind. Whether it’s for the short-term
(vacation) or long-term (retirement or a new home), determine how much
you need to reach each goal and create a savings timeline that will help
you get there.
Join the conversation about personal finance for young adults at
#PlanSmart. For the latest news and information, follow MetLife
on Twitter and like MetLife
on Facebook. Visit MetLife at www.metlife.com.
About MetLife
MetLife, Inc. is a leading global provider of insurance, annuities and
employee benefit programs, serving 90 million customers. Through its
subsidiaries and affiliates, MetLife holds leading market positions in
the United States, Japan, Latin America, Asia, Europe and the Middle
East. For more information, visit www.metlife.com.
Metropolitan Life Insurance Company (MLIC), New York, NY 10166.
Securities products offered by MetLife Securities, Inc. (MSI) (member
FINRA/SIPC), 1095 Avenue of the Americas, New York, NY 10036. MLIC and
MSI are MetLife companies.
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