High school and college students should be on the road to financial success by learning some basics and following some guiding principles. This ultimate checklist will guide them on their way. And most importan🅰tly, time is on their side✃.

“Young people have perhaps the biggest advantage compared to other investors: time. The earlier you learn and apply key financial skills, t🅠he greater your rewards will be over the long term,” says , a financial planner with Generational Wealth Development.

Financial Checklist for Young People

Yꦑou💯ng people can build financial success by following the tips on this checklist:

• Start by creating a realistic budget that takes into account wants and needs.
• Start saving and establish an 澳洲幸运5官方开奖结果体彩网:emergency fund to cover unexpected expenses.
• Be smart about credit.
• Don’t be scared of 澳洲幸运5官方开奖结果体彩网:investing in the stock market.

Learn How to Budget

Getting a handle on the money coming in and going out each month is the first step to building a solid financial foundation. So, tally up all bills and expenses as well as income each month and 澳洲幸运5官方开奖结果体彩网:build a budget. Make note of monthly bills and monthly income. How much money is left over after paying bills? Rather than spending it all, this is a great opportunity to begin saving.

Understand Wants vs. Needs

As you 澳洲幸运5官方开奖结果体彩网:build your budget, consider 澳洲幸运5官方开ജ奖结果体彩网:the difference between needs and wants. Th⛦ere are many ways people want to spend their m🎀oney, but not all of them are essential—these are needs. Take care of needs first and then consider what wants will fit into the budget.

“Prioritize spending on things you need (housing, food, gas) before things you want (new phone, c൲oncert tic𓆉kets, gas station junk). Budget for some fun, but learn to say no,” Durbin says.

Time to Start Saving

“The sooner you learn to budget for your life,♊ the better off you’ll be. Once you control where your money is going, y💛ou can start controlling how much you save,” Durbin says. “Pay yourself first by saving a portion of any money you earn or receive before spending it.”

One way to achieve that is to set up automatic savings into a 澳洲幸运5官方开奖结果体彩网:high-yield savings account or a brokerage account.

Learn the Power of Compound Interest

Depending on the account you put your savings into, it’s important to ensure you understand how that money grows. When interest gets applied not only to the principal amount you invest in an account but also to the interest accumulated previously, this is 澳洲幸运5官方开奖结果体彩网:compound interest. And it’s a sort of superpower, particula🔥rly when you’re young꧒.

“Take advantage of compound interest by contributing to a 401(k) or Roth IRA as soon as possible. Even small contributions in your 20s can grow 💮significantly over time,” says , a certified financial planner and founder of the Fiduciary Organization.

Build an Emergency Fund

Not everything that happens to you will fall into a neat budgeting bucket. 澳洲幸运5官方开奖结果体彩网:An unexpected expense, such as a big car repair or getting laid off from a job, can happen to anyone. Be prepared by 澳洲幸运5官方开奖结果体彩网:building a savings cushion to cover these expenses.

“Aim to save three to six months’ expenses in a 澳洲幸运5官方开奖结果体彩网:high-yield savings account. This 澳洲幸运5官方开奖结果体彩网:provides a financial cushion f🥂or unexpected expenses like medical bi🔜lls or job loss,” Milks says.

Use Credit Wisely

Be smart about your credit. Your bank will likely make it easy to set up automatic bill pay to ensure your credit card bills (and other recurring bills) get paid on time. Keep your credit card balances low. And only borrow money for essentials you need. These can help you create a credit history. And a 澳洲幸运5官方开奖结果体彩网:good credit rating can go a long way as you map out your future.

“Build a strong 澳洲幸运5官方开奖结果体彩网:credit history by paying bills on time, keeping 澳洲幸运5官方开奖结果体彩网:credit utilization low, and avoiding unnecessary debt. Good credit helps with securing loans, renting apartments, and even job applications,” Milks says.

Don’t Be Afraid of the Stock Market

Investing early and often when you are a young person is one of the best financial moves you can make. Time and the power of compound interest are on your side. So don’t hesitate to begin 澳洲幸运5官方开奖结果体彩网:investing.

“The 澳洲幸运5官方开奖结果体彩网:stock market can be this big, scary beast, but it doesn’t have to be. You have the biggest advantag🧜e of anyone: time,” Durbin says. “Spend the time learning about it now, so it can benefit you for the rest of your life. This 🐻knowledge could save you millions of dollars over your lifetime; isn’t that worth the time to learn it now?”

To start, you’ll need to educate yourself about investing. Then, set up your investment goals before selecting your specific investments. Finally, select the right brokerage account for you.

The Bottom Line

These financial tips will set young people on the path to a bright financial future. All are important, so make sure to incorpor☂ate all the tips as you build your financial life. Bud💧get, be smart with your credit, save for a rainy day (because they happen to all of us), and understand the difference between a want and a need. The biggest takeaways are the importance of investing and understanding the power of compounding interest.

You can build a lifetime’s worth of weal𝔉th by starting to invest in your 20s. So don’t be frightened by the stock market and instead inv𝕴est in your financial future.