Financial advice for young adults entering the work force
Laying the right foundation as you start your career is the key to future financial success, and at this lifestage, TIME is your greatest asset. Consider that each dollar you save in your 20s can be worth ten times as much as one saved in your 40s. Through the magical power of compounding, the beginning of your working life is the prime time to start saving towards retirement—even though many people don’t want to think about, or worse yet, act on this principle.
During this time, young adults have the exciting task of learning how to manage the spending and saving of their money within the constraints of their income. Here are some steps to take now to put your financial future on track:
- Identify your short, medium and long-term goals and budget your money accordingly – Your short term goals of less than five years might encompass a wedding, honeymoon, furniture or a new car. Medium term goals could include the purchase of a home and financing your future children’s college education, followed by long-term retirement goals. These goals will help you determine how to spend and save your money.
- Build assets through saving at least 10 percent of your income – It may be wise to invest in CDs or money market funds for your short term goals and the stock market for your longer term goals. Historically, the stock market has outperformed other types of investments over comparable time periods, but it’s not for the faint of heart. You may also want to join a 401K plan if available from your employer or open up an IRA account.
First Service Federal Credit Union can help compound your savings with an account that’s right for you:
- Fixed Terms from 3 months to 5 years
- Variable rate options available with 24 and 36 month terms
- JUMP (one-time “jump-my-rate” option is available)
Ask a Member Service Representative about how you can earn even more on your certificate rate with Relationship Rewards!
Money Market Accounts
- Minimum balance of $2,500
- No fixed investment period
- Maximum of six withdrawals per month
Money Market Account rates are adjusted weekly with market trends and earnings are credited monthly. A minimum balance fee of $5.00 is charged any month a Money Market Account balance falls below $2,500.
Individual Retirement Accounts
All of our IRA Accounts are fully insured by the National Credit Union Administration's Share Insurance Fund to $250,000 per account separate from your credit union accounts, and have no annual fees or maintenance charges.
- Establish an emergency fund – A good guide is to save three to six months’ worth of living expenses to cover rent or house payments, utilities, car payments, food, transportation and insurance into a separate account that could be easily accessed in the case of job loss or uncovered medical expenses. Don’t use the money for anything else.
First Service has special savings accounts that allow you to tuck away money for everyday expenses, as well as prepare for lifetime events such as vacation, education, graduation, wedding, retirement, or other personal commitments. We make it easy to save and budget your money for expected and unexpected events by offering a variety of specific use savings accounts like Holiday Clubs, Individual Retirement Accounts, HSAs, Money Market Accounts, and Share Certificates.
- Conserve time, money and paper with First Service Federal Credit Union’s convenient checking accounts with Free Online and Mobile Account Access, Free BillPayer, e-Statements, and a nationwide network of Free ATM’s – You’ll reduce the time it takes to pay your bills and save on the expense of printed paper checks and postage while helping the environment as well.
Checking Accounts – First Service offers a selection of easy-to-understand checking account options to meet your needs! Visit the checking account section on this website to choose the checking account that works best for you.
Free e-Services – First Service offers free, convenient e-Services to simplify your life.
Checking Rewards – Learn more about checking rewards programs such as Ampre and Cash Rewards.
- Borrow wisely – Avoid high-interest credit cards and pay off your credit card debit monthly. Work with First Service Federal Credit Union for your major lending needs including personal and vehicle loans, home mortgages and home equity lines of credit.
Loans – When you find the need to borrow, our competitive rates and flexible terms will help keep your payments low. First Service has money to lend with convenient, fairly priced services and affordable loan rates. Whether you want to purchase or refinance your home or automobile, our competitive rates and flexible terms will help keep your payments low.
Mortgage – Purchase
Mortgage - Refinance
Home Improvement Loans
Auto – Purchase
Auto – Refinance
VISA and VISA Rewards
- Understand your credit report - Your financial behavior over the past seven years, including how much credit you have, how long you've had it and whether you pay your bills on time is information included in your credit report. Three credit reporting agencies — Equifax, TransUnion and Experian — maintain these reports, and lenders buy them to help them decide whether to offer you a prequalification. Your credit report also carries your credit score ranked between 300 and 850 that many lenders use to decide whether you are creditworthy and will repay a loan. Your credit score can also influence the interest rate you pay. In many cases, the higher your score, the lower your interest rate. Your credit score is available from the three credit reporting agencies:
TIPS FOR EFFECTIVE FINANCIAL MANAGEMENT
- Pay off your credit card debt. It is senseless to pay 13 – 20 percent interest on credit card payments while your savings accounts earn one or two percent.
- If you cannot pay off your credit card debt, pay more than the minimum payment each month which in some cases will only cover the interest charges.
- Don’t worry too much about paying off student loans early. These normally have a much lower interest rate than credit cards. By making low payments on student loans, you’ll have more money to reduce high-interest credit card debt.
For help determining the best accounts and products for sound and productive money management during your Getting Started Lifestage, please contact us at 614-836-0100 or email us at email@example.com.