This past year was the first year that I was fortunate enough to work from my home. Working from my home has been a wonderful change for both personal and professional reasons. The only thing that caused a slight issue was the tax filing changes that I had to endure. The office in my home was now considered a tax deduction. I had to get some help learning how to deduct the things that are allowed on my federal taxes. If you are new to working from home and have a home office, this blog can help you learn what you need to know before tax time rolls around.
Graduating from college typically happens during your early twenties. In order to ensure that the future continues to remain bright and full of opportunity, it's essential for twenty-somethings to start planning for their financial well-being.
Here are three tips that you can use as you prepare to graduate from college to ensure that you are prepared to face whatever financial obstacles may come your way in the future.
1. Continue living below your means.
As a college student, you likely learned early in your educational career the value of being frugal. In order to pay for expensive books and tuition, many college students learn to live on a minimal income.
If you want to build a credible financial future, you should continue living below your means. It's when an individual wants to create a lifestyle that he or she can't afford that trouble ensues. The average American household has in $7,630 in revolving credit card debt, which can be crippling when trying to purchase a home or get an auto loan. By committing yourself to living below your means throughout your twenties, you will be able to preserve your financial health.
2. Establish an emergency fund.
Many college students live paycheck to paycheck. While that lifestyle might have worked when your financial responsibilities were minimal, as you grow into your twenties you will need to be prepared for emergency expenses.
Creating an emergency fund can help you absorb unforeseen costs like automotive repairs or medical bills. Experts believe that you should have enough money saved away in your emergency fund to cover three to six months of your living expenses in order to ensure that unexpected costs don't create financial chaos in your life.
3. Open a Roth IRA account.
Graduating college is typically the first step toward entering the workforce. While retirement may not be on your mind as you begin your working career, starting to plan for your inevitable exit from the workforce as a twenty-something can be beneficial.
As soon as you begin working, you should work with a financial planner to open a Roth IRA account. These accounts are designed to offer you the flexibility of saving for retirement, while still making the funds in your retirement account accessible in an emergency. As an added bonus, any of the money accrued in interest through your Roth IRA account will be tax-free.
Financial planning in your twenties is important when it comes to establishing healthy spending and saving habits for the future. Take the time to budget below your means, start an emergency fund, and open a Roth IRA account as soon as you start working to ensure your twenties are a decade filled with sound financial decisions.
Share20 December 2016
