Personal Finance in Your Early 20's

When people are very young, their parents always tell them they have to go to college and if they do not their life will be ruined and will end up working at McDonalds the rest of your life. So you do the college thing, take your classes, pile up student loans, and then graduation day comes. You walk across the stage, and now what? Sadly, there is very little guidance for those coming right out of college when it comes to finances, Here are guidelines for those who are in their early twenties that are just coming out of college or will be soon.

First, get the right job out of college. Not all jobs in your field are the same. When looking for a job, there's much more to consider than simple salary. What about the benefits? Will this job have opportunities for advancement and growth in your education? Is it something you really want to do? These are all extremely important questions to ask yourself before accepting a job right out of college. Don't settle for a job that will leave your career stagnant, you will want to move up in the world so put your self in a place where that can happen.

Secondly, treat your student loan like it's the plague. Here are the two options, you can pay your payment of a couple of hundred dollars a month for the next ten or twenty years paying upwards of 7 or 8% interest, or you can make paying it off a priority, by sending every extra penny sitting around toward it, and you can probably pay it off in a year or two, and be done with it forever. Try paying down your debt as much as you can for six months, if you don't like it, you can always borrow more money!

Don't let your education stop once your tassel moves from one side your cap to the other. Remember that education is a life long process, especially for a lot of the quickly changing career fields, such as information technology. Read trade magazines, learn new skills, and make your self more valuable to your employer.

You should start saving for retirement as early as you can. Compound interest will allow your small monthly deposits into your investment account to turn into huge dividends when you retire. Be sure to use tax sheltered accounts such as a 401K, IRA or ROTH IRA if at all possible; they will save you a ton of money in taxes.

Finally, think critically. You are still young in your financial life and will be purchasing a home, an automobile, a cell phone plan and other things of quite some size in the near future. Be sure to read the fine print on every major purchase, and only agree to something if you understand it wholly and know what you are getting your self into. If you don't quite understand, ask. This does not mean you should ask the person who is trying to sell you the product, because they are biased. Find someone you know is good with money who doesn't have a financial interest in the situation and ask them.

Be sure to follow these simple tips in order to get your financial and career off in the right path.