Financial Services & Resources For Young Adults

Corner of credit card up close
Do you want a credit card? Okay. Get one, but know that having a credit card is a huge financial responsibility. The approach to managing it must be planned, intelligent and educated; after all, many students rack up hundreds – if not thousands – of dollars in debt while in college. Avoiding this financial pitfall is key! So how can you use your credit card wisely?

The first thing to consider is the reason you wanted a credit card. Did you apply for a credit card to establish and build credit? Did you apply so you could use it for emergencies or education expenses? Whatever the reason, be sure it is well-known and respected (by you) through the life of the credit card. One slip-up on those new sneakers or that great jacket could lead to more money mistakes and get you into trouble. Remember, when you use a credit card, you aren’t borrowing money from your parents; the cash is owed – possibly with interest – to a financial institution.

The next thing to think about is your monthly spending. Most likely you will want to keep your credit card bill below a certain amount so you are sure to be able to pay the amount in full each month. You also want to be aware of your limit and ensure you aren’t overspending, so you don’t get hit with over-the-limit fees. You should also keep your spending to around 50 percent of your credit limit or less (this means you should only spend up to 50 percent of your limit so your available credit will be the same or more than your balance).

Think about repayment options. It makes sense to pay the balance of your card in full each month. If you have to carry a revolving balance, think about paying the minimum twice a month to reduce the amount of interest the balance will carry. Also, keep in mind your interest rate and know that if you only pay the minimum each month, it could take quite a while to repay and your repayment amount could end up being much more than how much you actually spent.

Finally, keep track of your credit and check your credit report once a year. When you apply for a free credit report, you can keep tabs on your performance and ensure there aren’t any mistakes on your report. Mistakes can lead to future issues when applying for loans, buying a car or even getting a job.

These steps, if followed correctly, can lead to a healthy financial track record and keep you on point for spending wisely!
Man holding open wallet
Okay, so you’re all geared up for that once-a-year fling at your friend’s beach house in Key West. Here’s the catch: you’ll need to chip in on the rental fee. What if you don’t have any cash on you? You may think that taking out a cash advance on your credit card is the perfect solution. What’s a little debt compared to a week in the sun with good friends, good food and good drink?

Stop right there.

More often than not, a cash advance is the most expensive way to pay for something, not to mention the dreaded “gateway” to unshakeable debt. That’s because there are several costs associated with cash advances that oftentimes make them more expensive than other types of loans.

Let’s Talk About Fees
For starters, if you take a cash advance using a bank credit card, you will probably pay an ATM fee. The money that you advance will also be charged a higher interest rate than you typically pay on your card – check your credit card paperwork to see exactly how high your rate will be. Plus, most credit card lenders will charge you interest from the day you take the advance, unlike when you make a regular purchase on your card. (Purchases are often given a 25-day grace period before the interest kicks in.)

Your credit union probably offers cash advances on certain loan products, and typically there is no charge for the service. Your credit union may not even charge you a higher interest rate for the advance, either. But even if you have a credit union credit card, it’s still wise to use cash advances in emergencies only, since they are just another form of debt.

Avoiding The Urge To Advance
Think about it: if you don’t have the dough you need to pay for your share of the beach house, where will you get the money from to pay off the cash advance? Will you work more hours at a part-time job? Or take on small odd jobs from friends and neighbors? If this is your plan, there is a chance it may backfire. What if you can’t find enough cash to repay your advance? It’s a scary thought.

The bottom line is that any cash you borrow must be repaid as quickly as possible so that your credit rating remains intact. Not paying your bills or making only the minimum payments on your credit cards can lower your credit score – and as you already know, that will lead to borrowing problems in the future.

So be smart and save up for that sweet vacay instead of taking out an expensive, and risky, cash advance. After all, paying in cash is always less expensive than taking out a loan!
Inside of apartment
You may not think you can afford a home of your own in your early 20s, but if you’ve been saving and you take these steps, homeownership could be in your near future.

Decide Where You Want To Live – If you’ll be moving a lot early in your career, it’s best to wait to buy your home. But if you know where you want to spend at least the next five years, it’s easier to hone your home search.

Calculate How Much Home You Can Afford – This can be based on how much you have saved, how much of a down payment you can make, and how much you can afford in monthly mortgage payments. A mortgage professional at your credit union or financial institution can help you determine this amount, as well as how much you’ll need for a down payment.

Build Your Credit – Your credit score has a lot to do with the amount you can afford to borrow. Make sure you get your credit report and have no knocks on your credit. Pay your bills and credit payments on time and clean up any marks you may have so you can get the loan you need.

Get Pre-Approved – Talk with a mortgage professional to get a loan that fits your budget, so you don’t overpay or buy too much home for your money.

Stay On The Right Path – It may take a few years to build up the money or credit to buy, but if you don’t stray financially from your path and you’ re determined to reach your homeownership goal, you could be getting the keys to that home on your schedule.
Two men talking at coffee bar
You’ve likely heard the real estate adage, “Location, Location, Location.” Well, a similar phrase holds true with careers: “Network, Network, Network.” Generally speaking, networking is the number one way to get a new job. Since hiring supervisors have a lot on their plate, they’d much rather receive a good candidate via a direct suggestion rather than sifting through hundreds of resumes.

You may think, “But I don’t have a network!” Whether you know it or not, you do! Family, friends, classmates, professors, old bosses and even coaches are all in your network. Make a list of everyone you know and start connecting and reconnecting. You don’t want to reach out and beg, “Give me a job!” Rather seek out advice, ask to have a meeting, request recommendations or just let these individuals know your qualifications and your near-term and long-term goals.

There are opportunities to network everywhere you go. Every social engagement, meeting and even conversation at the park is an opportunity to build your network. Be ready for these encounters by having a short description of yourself, including your achievements, education, and skills.

Here Are Some Ways To Meet People And Build Your Network:
  • Attend Professional Meetings, Conferences And Conventions
  • Take Classes In Your Profession Or Interests
  • Volunteer At Organizations That Interest You
  • Talk With Your Neighbors And Acquaintances
  • Always Be Ready To Strike Up A Conversation Wherever You Go
  • Reconnect With Former Colleagues And Classmates On Sites Like LinkedIn And FaceBook
  • Attend Workshops, Book Readings, And Lectures

Expanding your network can be fun. Each time you meet someone new or talk to someone in a new way, you never know where you’ll end up. As you go through life, you will connect with many different types of people. Develop and nurture these relationships, and it will help you expand your network.  
Man holding empty wallet
Whether you are still a student or have started your career, chances are you are feeling the pinch of this economy. You may feel like you are entirely squeezed dry but when you focus on saving money, there are quite a few areas you can cut back.

Only Buy Essentials – This goes for food, clothing and life extras. Instead of buying name-brand snacks, try the store brand. Swap out takeout lunches for brown bag meals you make at home. Try to get another season out of your coat. You don’t have to exist solely on peanut butter and jelly sandwiches or walk around in rags but you do need to shop smart and stick to the basics.

Only Buy Items On Sale – When you are shopping, look for sales. Coupons also come in handy too – especially since some stores double them. If you utilize both tactics (sales and couponing), sometimes the additional discount could be applied to the overall total of your shopping cart. Another tip is to buy clothing after that particular season’s sale has begun. Or shop at consignment shops. You’ll still get high-end stuff at a fraction of the cost.

Cut Out Unnecessary Expenses – Calculate how much money you spend dining out, going to the movies and meeting friends after work. Road trips to visit buddies and vacations with family and friends is another culprit sabotaging your budget. Consider the popular “staycation” fad. Check out all of the natural, historical and interesting activities and locations in your local area. You may be surprised at what a fun “trip” you have!

Take On A Part-Time Job – Moonlighting is a great way to bring in some extra cash – especially during the holidays or over the summer. Depending on your job, a part-time gig can also provide you with a generous discount, which will save you even more money. A handy tool if it’s a location you already frequent.

Cut Back On Amenities And Utilities – How much do you watch cable? Do you really need a “smartphone” when you have the Internet at your apartment? Could you get away with turning the heat down a few degrees or switch the air conditioning off at night?  Evaluate your bills and see where you can trim off some excess.
Shopping cart with money and no sign
Can you challenge yourself to go one month without spending cash on things that aren’t absolutely essential? This is tough work but by going 30 days without unnecessary shopping, you can help get your budget under control.

On average, it takes about a month to break a habit. If you are a big spender, this is a great way to change your behavior. It’s also a way to examine your relationship with money. Often people spend money due to emotions. Do you shop when you are stressed or upset? Do you do it when you are frustrated? By using this strategy, you will have a great understanding of how you spend money – and why.

Before you begin, you can decide what is essential to your life; however, be realistic. Is that daily latte an essential item? For the most part, try to get by on what you already have, make meals at home and think before you make every purchase.

At the end of this experiment, chances are, you’ll have something extra in your account. At the very least, you’ll have some understanding of what makes you buy the things you do and the triggers that cause you to make purchases.