Todayís young professionals are normally eager, motivated, and dedicated to their career. Thereís nothing like graduating college and stepping into the ìprofessionalî career that youíve always dreamed of. Young, free-spirited, and optimistic, the young professionals of today are our future leaders.
As a financial freedom advocate, I wonder a lot about finances and what people are doing with them. Iíve wondered lately about whether todayís young professionals are savers or spenders? If we gauge the ages of between 20 and 28 years old, are they spending most or all of their money, or are they saving a good bit of it?
Recent financial statistics tell us that young adults carry more debt than they can handle. The average 25 year old on average carries about $4000 in debt and families up to $8000 in debt. Add student loans to that and it makes it more difficult for the young professional to save much of anything.
Spending your hard earned money can be fun and as a young professional, a few luxuries to enjoy should not be a big deal, granted it is within your budget. Budgeting is one of your best tools to becoming financially free so if you donít have one, sit down and make one as soon as you can.
A wise financial woman once told me that when you sit down to do your budget, make sure you have a category for savings and pay yourself first. Before you allot any money for vacations, toys, eating out, or any other recreational activities, decide on a certain percentage of your paycheck that you will put into savings every time you get paid. If you want to grow your savings, then you must make the effort to put money in your savings every month, even if itís just a little.
If you have found yourself with a heap load of debt, whether it is credit cards, personal loans, or student loans, declare war on that debt immediately. The longer you carry that debt, the more interest you are paying, which is money that you could be putting into savings.
If youíre living paycheck to paycheck and paying the minimum balances on your debt, get a calendar and for two weeks track every penny that you spend. You may find that youíve spent $100 on little things, such as eating out, clothing, or the movies, and that $100 is money that you could be paying on your debt. Determine to get out of debt as soon as possible and you will experience a freedom like no other. As a soldier strategized on the battlefield, you will have to strategize on the war against debt, but be encouraged because you can do it!
The last tip Iíd like to give to young professionals is to set goals and write them down. Contemplate your career goals, financial goals, and so on and write them down and look at them frequently. Create action steps toward accomplishing those goals and watch yourself little by little, step by step, achieve whatever it is you want. As a young professional, determine to be a saver and not simply a spender. Thirty years down the road youíll be smiling big when you can retire at age 55 or 60 with enough cash flow to live the lifestyle that youíd like. Go for it.
This post is from the team at CreditDonkey. CreditDonkey offers personal finance and small business credit card tips.