Proper financial planning can help you prepare for your future. For unexpected expenses, enrolling in employee loan programs is a good option. Having a stable source of income can help young employees get started on their road to financial security. However, this journey can be challenging. People working for a long time know the importance of financial planning. If you are new to the workforce, you may not be as familiar. It may just be a concept you have heard before.
So, how will you get started?
Understanding the basics is a must. To properly plan and manage your finances, you have to be financially literate. This is something that many individuals overlook. In the United States, only 57% of adults are considered financially literate.
What you can do is educate yourself. Learn to research. Know more about your finances, such as taxes, debts, loans, and interest rates.
You should also learn how to budget your money. Track all your expenses. Making a list of all spending may help.
Then, evaluate your expenses. Categorize them into needs and wants. Prioritize your needs. See if there are any items from your wants that you can remove or lessen.
Stick to your budget. Do not overspend.
Include in your budget the amount you should save. When it comes to saving money, it is best to start young.
Allot a specific percentage of your income as savings. To prevent yourself from spending it, consider opening a separate bank account.
Check for employee benefits available to you. Ask your company’s human resources department about them and how you can enroll. Common examples are health insurance, Health Savings Accounts and gym membership.
Some companies help their employees get low-cost loans through employee loan programs. You may also be eligible to apply for an affordable loan even if your employer does not participate in such a program.
Even if you are still young, you should be planning for your retirement. Figure out the lifestyle you want to have once you stop working. How much do you think you will need to enjoy it?
A good strategy is to max out your 401(k) savings options. You can do this through your employer, which means a specific amount will automatically be deducted from your paycheck and will be placed in your 401(k) contributions.
Protecting Your Future
Aside from your retirement, you should also prepare for various things. Consider getting insurance, such as life and long-term disability insurance policies. These will protect you against unexpected expenses in case of a covered peril or situation. It is also easier to qualify, and the rates are cheaper when you buy these insurance coverages when you are young.
Try to set aside a small amount every week or month for unexpected expenses that may come up. This way, you would not need to use your savings or withdraw from your retirement funds.
If you happen to have an emergency that resulted in huge expenses, consider employee loan programs. SNBNY, for example, offers ACCESS LOANS® low-cost loans for employees facing financial hardship.*
Did you enjoy this blog? Please review us to help us reach more employees in need of financial education. We appreciate your feedback – CLICK HERE ⭐⭐⭐⭐⭐
NOTICE: This communication and its content are for educational and informative purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but not a representation, expressed or implied, as to its accuracy, completeness or correctness and it is not a replacement for the guidance or professional advice of an accountant, certified financial advisor, or otherwise qualified professional.
No information available through this communication is intended or should be construed as any advice, recommendation or endorsement from us as to any legal, tax, investment or other matters. Nothing in this communication shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient. We recommend that you never provide a third party with names, account numbers, or other sensitive information unless you are certain that it has a legitimate business purpose.
* ACCESS LOANS® products are funded and serviced by Safra National Bank of New York (“SNBNY”).