Beginning your life as a young adult comes with a lot of excitement. Make sure that you have a decently planned budget. Before you go for any expenditures spend some time searching for good saving tips, better ways of spending money, how to get better deals and rewards so that you can make the most of your available cash or income.
Make sure to take a little extra care in planning your finance apart from your budget, loan management or the extra income. Listed are some cool and easy to follow tips that will help you have a better personal financial plan.
Save for emergency – start now
The basic rule of a good financial plan is “pay you first”. Irrespective of the debts you have, are it a student loan or a credit loan and regardless of how meek your pay might be, make a firm decision to put a specific amount in your emergency account every month. At the end of it you’ll have a smile on your face imagining how much it helps in the future.
Develop the habit of putting aside some money in the safe, making it a mandatory part of your financial plan every month. The results are great, apart from the money you saved in your emergency account you’ll also have some money for vacation, fun and also for retirement. If you follow it strictly may be you’ll also save enough for the down payment of your new house.
Start saving for your retirement now
It’s never too early to plan for a happy and fun-filled retirement. The sooner you start, more are the number of benefits you gain. Start investing in private equity funds, precious metals or policies which mature slowly giving you good profits. It helps you have a source to have your basic necessities and comforts as well.
Pay taxes – Smartly!!
Make sure that you understand the concept of income tax thoroughly before you take your first salary. Have a clear understanding of the application of tax rates and calculations on your salary. Make sure you have enough amounts after all the tax rates are applied to meet the goals of your personal financial plans.
Luckily a lot of online tax calculators are available which help you with the tax calculation work. Paycheck City is a good one. These calculators help you in calculating the gross pay and the amount to be paid as tax. It also gives us the net pay which we are left with after the taxation process.
Let’s take an example. If you are in California earning $35,000 then your take home would be $27,600 after the taxation which is around $2,300 a month. Before going for a job change understand the effects of marginal tax rates on your increased pay. Moral of the story – a pay hike from $35,000 to $41,000 a year would not give you an extra amount of $6000 per year or $500 a month. It will only be $350 a month which amounts to $4200 per year. Also it depends on the state where you live.