Bills. Rent. Groceries. Life can start to feel really real — not to mention expensive — after you finish college. Today we are going to discuss personal finance advice for young adults.

Financially speaking, it can be challenging to keep your head above water as responsibilities start kicking in after college. Resist the urge to turn to credit cards for everything. Now’s the time to create a strong financial foundation — your future self will thank you.

Ready to start working toward financial stability? Here are some simple tips for setting your personal finances straight as you transition from college to the real world…

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Make A Budget

Make A Budget

It’s hard to make budgeting sound anything but boring. But consider this: in the long run, establishing a budget can help reduce stress, diminish debt, and help ensure a healthy financial future. Nothing boring about that!

Planning your budget will depend on a variety of factors like your cost of living, income level, and overall goals.

For many, a ‘50/30/20’ budget — that’s 50 percent on necessities, 30 percent on ‘wants,’ and 20 percent on savings or paying off debt, is a desirable ratio. This post offers a great education on budgeting for beginners.

Build A Safety Net

Did you know that only about 30 percent of Americans have more than $1,000 in savings?

That’s a pretty sobering statistic … especially when you consider the fact that a single visit to the dentist, vet, or mechanic could easily cost $1,000 or more.

Why put undue stress on yourself? Give yourself a leg up by building a financial safety net. By putting a small amount of money into a savings account every month, you’ll begin to build your own personal resource for these everyday emergencies.

It’s nice to be able to rest easy knowing you’re prepared for unexpected events. It’s also nice to know you don’t have to call your parents or a friend for a loan if you’re faced with an unanticipated expense!

Understand Taxes

W-2 … 1099-MISC … 1040-ES … What does it all mean? Taxes are confusing, no doubt about it — especially if you, like many young adults, are part of the ever-growing gig economy.

The easiest way to contend with your taxes is by hiring a tax professional. Nothing wrong with that … but you should still have a basic understanding of taxes.

Understanding your taxes can help you be better prepared for when tax season rolls around.

For instance, did you know that if you work from home, you may be able to deduct a portion of your rent/mortgage and utilities?

When you understand how the tax system works, you can either minimize how much you pay or maximize how much you’ll get back, depending on your situation.

Understand Taxes

Learn About Investing And Trading

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You probably have a general idea of what stock market investing entails: buying security and hoping that it will rise in value over time. It’s a time-tested strategy that many people use to save for retirement.

However, that’s not the only approach to the market. Day trading is another approach where you attempt to profit from short-term stock spikes. Low-priced securities like penny stocks can be highly volatile — meaning they are risky, but they can potentially deliver great returns.

Stock investing or trading should not be entered lightly. It’s important to educate yourself on the mechanics of the market before you start risking your hard-earned money — otherwise, it’s not much better than gambling!

Start Slow

Feeling overwhelmed? Don’t be. You’ve got to remember: it takes time to build a strong financial foundation.

These tips are a great start, but you’ll see the greatest benefits over time. Start slow and stay diligent. Continue to learn as you grow. But rest assured — by establishing a strong foundation now, you’re taking a proactive step toward building long-term financial stability.