Although retirement may seem light-years away for many young adults, early planning and money management is important to achieving financial freedom in the future. To help young adults take charge of their financial life, MetLife has added a new workshop to its workplace-based PlanSmart® Financial Education series, “Smart Money Moves in Your 20’s and 30’s.” The workshop offers ten relevant and digestible financial tips to young adults driving home the importance of proactive financial planning.
The PlanSmart Financial Education series, launched in 2008, offers a selection of workshops relevant to employees of varying ages and career stages. The series fulfills employees’ interest in financial education and planning help in the workplace and addresses a variety of topics such as credit management, planning for college, estate and retirement planning -- and now, financial planning, for employees that are just out of school to ten or more years into their career.
“As the economy evolves, it’s more important than ever for young adults to plan for their futures and understand the 'time value' of preparing for their future,” said Jeff Tulloch, vice president, MetLife. “The workshops offered through PlanSmart help individuals of all ages be better positioned to meet their financial goals.”
10 Personal Finance Tips for Young Adults
Look at your paycheck
: To plan accordingly, it’s important to know exactly how much you take home every month after taxes and deductions.
Create a budget
: Now that you know your monthly income, set a budget to keep an eye on your finances. This includes being honest about knowing your “needs” versus “wants” and living within your means.
Know the “28/36 rule”:
Allocate approximately 28 percent of your monthly budget on housing (rent, mortgage) and keep total debt costs (student loans, credit card payments, etc.) within 36 percent of monthly income.
Save at least $50 a week because “stuff” happens
: Because things happen unexpectedly in your twenties, aim to set aside a minimum of $50 per week. Save this money in an account that’s strictly for emergencies.
Become a millionaire by age 65:
Start saving and investing as early as possible. As a younger person, time is on your side and even the smallest money moves are beneficial thanks to the power of compounding.
Sign up for your employer’s 401(K) or 403(b) plan and get the match:
If you have the opportunity to invest in a 401(k) or 403(b) plan through your employer, RUN, do not walk, to sign up. Even small amounts of money invested in your twenties can grow into significant amounts.
Start a Roth IRA and contribute:
A Roth IRA is an excellent savings vehicle for many younger individuals who are able to save more. There are many advantages to opening this kind of account, such as accessing money without penalty before retirement.
: Although life insurance and disability insurance may not be a top-of-mind concern, consider protecting yourself in the case an unforeseen circumstance occurs. The general rule of thumb is to secure 10 times your salary in life insurance and 65 to 85 percent of your net pay in long-term disability insurance.
Aim for 760 or higher:
This is the credit score you need to qualify for the best interest rates on a new home or a car. Paying bills on time and paying down debt will help you maintain a strong credit score.
Develop distinct savings goals:
Even if it’s a small one, always have a savings goal in mind. Whether it’s for the short-term (vacation) or long-term (retirement or a new home), determine how much you need to reach each goal and create a savings timeline that will help you get there.
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MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit
Metropolitan Life Insurance Company (MLIC), New York, NY 10166. Securities products offered by MetLife Securities, Inc. (MSI) (member FINRA/SIPC), 1095 Avenue of the Americas, New York, NY 10036. MLIC and MSI are MetLife companies.