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Financial Tips ?

Hey everyone, I’m looking for some advice and stories from young adults who have navigated financial challenges. I’m particularly interested in tips about:

Housing: How to find affordable options and manage rent payments.
Credit Cards: Any recommendations on how to build credit wisely and avoid common mistakes?
Taxes: How to prepare for taxes as a young adult, especially if you're just starting to file.
Job Market: Tips for entering the job market and navigating career growth in today's economy.
Feel free to share your experiences, especially if you’ve learned valuable lessons along the way. Thanks in advance!

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Subject: Career question for you

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Doc’s Answer

CREATE A BUDGET AND STICK TO IT
Credit card debt can sneak up on you if you're regularly making purchases you can't pay off each month. The best way to avoid overspending is to make a plan for each dollar you earn, otherwise known as a budget. Choose the budgeting plan that most speaks to you. You can divide your spending into needs, wants and short- and long-term financial goals with the 50/30/20 plan or use one account for fixed expenses and another for discretionary spending with the multiple-account plan. No matter which strategy you use, get into the habit of tracking expenses and making sure you're spending less than you earn, and you'll be far less likely to fall into debt.

PAY CREDIT CARD IN FULL EACH MONTH
Credit cards make it easy to buy big-ticket items that you can't immediately afford, since you have the flexibility to pay down the balance over time. That can be useful if, say, you suddenly need to make a major home repair and you'd rather not empty out your emergency fund. But one of the best ways to avoid debt is to look at your credit card like a debit card: Only buy items you know you'll have enough money in your checking account to cover by the time your bill is due. You'll never pay interest and your credit utilization will stay low, potentially strengthening your credit score. But most important, you won't rack up debt that may be difficult to get rid of. Set up calendar alerts and bill reminders to pay credit card and loan bills on time, you'll avoid late fees and increased interest charges. Plus, when you miss a payment, you run the risk of a drop in your credit score. That could mean having a harder time qualifying for the lowest rates on credit products in the future, meaning you'll pay more to take on debt.

CAN'T AFFORD IT, DON'T BUY IT
One of the most dangerous approaches to having a credit card is living under the illusion that you can afford things you actually do not have the money to afford. One good rule to live by is if you can't pay for something in cash, then you can't afford it with a card. By budgeting out your monthly expenses you can better track where your money is going and where you can afford to spend it. Every month, parcel out how much to put in savings, your 401(k), and how much extra you have left to spend on the necessities. So if the time ever comes where you need to do a major cut down of your expenses you will know exactly what to cut. Handy online tools, like Money Manager or a budget calculator can help you with a budget and automate some of the budgeting process for you.

Hope this was helpful Angle

Remember, debt doesn't have to be the enemy, especially if you use it strategically and ensure it won't overwhelm your budget. It's possible to make use of financial products that can get you rewards and grow your credit, yet still stay out of debt. Stick to your spending plan and pay off monthly credit card balances in full, and you'll have taken the first and potentially most important steps toward lasting debt freedom.
Thank you comment icon Thank you, this is amazing! I really needed it. angel
Thank you comment icon The best way to predict your future is to create it Angel. Doc Frick
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James Constantine’s Answer

Good Day Angel!

Financial Tips for Young Adults

Housing: Finding Affordable Options and Managing Rent Payments

Research the Market: Start by researching the rental market in your area. Websites like Zillow, Apartments.com, and Craigslist can provide insights into average rent prices.
Consider Roommates: Sharing an apartment can significantly reduce costs. Look for roommates through platforms like Roommates.com or local university boards.
Negotiate Rent: If you find a place you love but it’s slightly out of your budget, don’t hesitate to negotiate with the landlord. They may be willing to lower the rent or offer incentives like a month of free rent.
Understand Lease Terms: Before signing a lease, ensure you understand all terms, including security deposits, maintenance responsibilities, and what happens if you need to break the lease early.
Budgeting for Rent: A common guideline is that your rent should not exceed 30% of your monthly income. Use budgeting tools like Mint or YNAB (You Need A Budget) to track expenses.

Credit Cards: Building Credit Wisely and Avoiding Mistakes

Start with a Secured Credit Card: If you’re new to credit, consider getting a secured credit card where you deposit money as collateral. This helps build your credit history.
Pay on Time: Always pay at least the minimum payment by the due date to avoid late fees and negative impacts on your credit score.
Keep Utilization Low: Aim to use less than 30% of your available credit limit each month; this positively affects your credit score.
Monitor Your Credit Report: Regularly check your credit report for errors using services like AnnualCreditReport.com, which allows one free report from each bureau annually.
Avoid Unnecessary Debt: Only charge what you can afford to pay off each month to avoid accumulating debt.

Taxes: Preparing as a Young Adult

Understand Your Filing Status: Determine whether you’ll file as single or dependent based on your situation; this affects tax rates and deductions.
Gather Necessary Documents: Collect W-2 forms from employers, 1099 forms for freelance work, and any other relevant documents before tax season.
Use Tax Software or Professionals: Consider using tax preparation software like TurboTax or H&R Block for guidance through the filing process, especially if you’re unfamiliar with it.
Know Deductions and Credits Available: Research potential deductions (like student loan interest) and credits (like the Earned Income Tax Credit) that may apply to you.
File Early and Electronically: Filing early can help prevent identity theft and ensure you receive any refunds sooner.

Job Market: Entering and Navigating Career Growth

Networking is Key: Attend industry events, join professional organizations, and utilize LinkedIn to connect with professionals in your field.
Tailor Your Resume and Cover Letter: Customize these documents for each job application to highlight relevant skills and experiences that match job descriptions.
Prepare for Interviews Thoroughly: Research common interview questions in your field and practice responses with friends or mentors.
Be Open to Entry-Level Positions: Sometimes starting in an entry-level role can lead to greater opportunities within a company as you gain experience.
Seek Continuous Learning Opportunities: Take advantage of online courses (e.g., Coursera or LinkedIn Learning) to enhance skills relevant to your career goals.

By following these tips across housing, credit management, taxes, and job searching strategies, young adults can navigate financial challenges more effectively.

Top 3 Authoritative Sources Used in Answering this Question:

Consumer Financial Protection Bureau (CFPB) - Provides comprehensive resources on managing finances including housing options, credit cards, budgeting tips, and understanding taxes tailored for consumers.

National Endowment for Financial Education (NEFE) - Offers educational resources aimed at improving financial literacy among young adults covering various topics such as budgeting, saving, investing, and understanding credit.

IRS.gov (Internal Revenue Service) - The official website of the IRS provides essential information regarding tax filing requirements, deadlines, deductions available for young adults entering the workforce.

Probability that the answer is correct: 95%

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|==========================God Bless You, Richly!==========================|
|===========================James Constantine===========================|
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Thank you comment icon I appreciate your support, James Constantine angel
Thank you comment icon God bless you angel
Thank you comment icon We Will Help You Here At Career Village! God Bless You Too! James Constantine Frangos
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Jason’s Answer

Hey Angel,

These are great questions you are asking.

For me with credit cards my first piece of advice is to proceed with caution. They are a bonus for the financially responsible but a huge detriment to those who aren't. A great way that I built credit while in college was to set my Netflix subscription on autopay on a Credit card. I didn't do anything that would have jeopardized my credit in the mean time which I highly advise. Rule of thumb is to never put more money on your credit card than you have money in your account to pay for. This is both an incentive to spend your money wisely but also that if you like nice things find ways to make the money to afford to buy them and do so outright as much as possible.
Thank you comment icon Thank you, Jason for the advice. angel
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Cicely’s Answer

Hi Angel! You already have some great advice here and I want to expand upon it:

One of the most impactful actions you can take during your education is to READ and READ AGAIN. Knowledge is power but comprehension is key. Throughout your high school education, you were tasked with reading textbooks, novels, books on historical fiction and social issues. Then, after completing the assigned reading, you were tasked with book reports, research papers, quizzes and tests. The goal of this was to ensure you properly digested the information and can show proof of understanding. These tactics are vital to success and should continue outside of the classroom. Thus, to answer your question, I recommend reading.

Below are books that have helped me with the areas of interest you listed above. I recommend taking notes as you read (mark the pages with post-its or utilize a notebook) and referring back to this knowledge when it's time to activate. In addition, if you have any adults that you trust, value and look up to, talk to them about what you've learned and ask questions for clarity and understanding.

Housing: How to find affordable options and manage rent payments. - "The Financial Diet" by Chelsea Fagan and Lauren Ver Hage (4.4 star rating)
Credit Cards: Any recommendations on how to build credit wisely and avoid common mistakes? - "I Will Teach You to Be Rich" by Ramit Sethi (4.5 star rating)
Taxes: How to prepare for taxes as a young adult, especially if you're just starting to file. - "Taxes Made Simple: Income Taxes Explained in 100 Pages or Less" by Mike Piper (4.6 star rating)
Job Market: Tips for entering the job market and navigating career growth in today's economy. - "What Color Is Your Parachute? For Teens" by Carol Christen and Richard N. B (4.5 star rating)
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Chinyere’s Answer

Hi Angel,

Navigating financial challenges can be tough, but you're not alone in this journey. Here are some tips from young adults who have been there:

Housing
- Roommates: Sharing an apartment or house with roommates can significantly cut down your rent costs.
- Location: Look for housing slightly outside of city centers. Suburban areas often have lower rents.
- Negotiate: Sometimes landlords are willing to negotiate on rent, especially if you're a long-term tenant.
- Utilities: Consider utilities when budgeting for housing. Look for places with included utilities to simplify budgeting.

Credit Cards
- Start Small: Begin with a secured credit card or a card with a low limit.
- Pay in Full: Always try to pay your balance in full each month to avoid interest charges.
- Utilization: Keep your credit utilization rate low (below 30% of your credit limit).
- Consistent Payments: Make your payments on time to build a positive credit history.

Taxes
- Organize Documents: Keep all your financial documents, such as W-2s, 1099s, and receipts, organized throughout the year.
- Learn Deductions: Familiarize yourself with common deductions and credits that can reduce your taxable income.
- Free Resources: Utilize free tax filing resources, like IRS Free File, or seek help from a volunteer income tax assistance program.

Job Market
- Networking: Attend industry events, join professional groups, and connect with people in your desired field.
- Skills: Continuously develop your skills. Online courses, certifications, and workshops can make you more marketable.
- Internships: Consider internships or entry-level positions to gain experience and make connections.
- Resume and Cover Letter: Tailor your resume and cover letter to each job application. Highlight relevant skills and experiences.

Remember, everyone's financial journey is unique. Don't hesitate to seek advice from financial advisors or mentors who can provide personalized guidance. You've got this!

Best wishes!
Thank you comment icon I appreciate your support, Chinyere angel
Thank you comment icon You're welcome! Chinyere Okafor
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Jerome’s Answer

Be VERY careful with credit cards. If you don't have the cash to buy it, don't put it on a card.

I started using my card solely for Gas and Groceries. I made sure it was paid off each month and that helped a LOT. If you end up with a large balance, it will hurt your credit and it will cost you a TON in interest payments.
Thank you comment icon You rock! This advice is very helpful. angel
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Kenji’s Answer

Taxes: I recommend using FreeTaxUSA (https://www.freetaxusa.com/?utm_source=google&utm_medium=cpc&mtm_group=Branded&utm_campaign=Branded-Exact-No-Account-Paid-Filed(CPC)&utm_content=freetaxusa&utm_term=freetaxusa&utm_id=c&gad_source=1&gclid=CjwKCAiA-ty8BhA_EiwAkyoa31ICFMVismotSK2SHiiPvQCnGw2-sPIou1PIDIB5mMOjmJj3SO39pRoCbhsQAvD_BwE). As far as I know, it’s the cheapest service out there. Federal tax returns are free, and State tax returns cost $15. I’ve never spent more than 20-30 mins filling out the forms, and I always receive my tax returns via direct deposit within a few weeks.

Job market: quality of applications will typically be more effective than quantity. I’ve learned that tailoring your resume to the job, while taking much longer than mass applying, results in a much higher response rate.
Thank you comment icon Thank you for taking the time to help. angel
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deborah’s Answer

Hello Angel! I applaud you for thinking about this as a young person. By asking these questions, you are becoming better prepared for a more financially successful future. Many have already provided helpful information in their answers. Here are some practical, focused tips.

Before I answer your specific questions, remember this word: Budget. You must plan and manage your finances using a budget. https://consumer.gov/your-money/making-budget

Housing: How to find affordable options and manage rent payments.

Answer: your rent should not exceed 30% of your monthly salary. there are rental companies that base rent on income. also, one thing I did was get a roommate or two to make my rent affordable.

Credit Cards: Any recommendations on how to build credit wisely and avoid common mistakes?

Answer: you can build credit without credit cards. Experian and other companies are now offering debit card that help build credit. one of the best ways to build credit is a car loan. you may need someone to co-sign for your first car loan. you can use credit cards to build credit, but make sure you pay the balance off each month.

Taxes: How to prepare for taxes as a young adult, especially if you're just starting to file.

Answer: you will receive a W2 in January. the IRS offers free direct tax file for most states: https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers. They also have a special program called VITA which offers free filing assistance if available where you live. there is a locator on this same webpage. also, online tax companies offer free filing for simple 1040 form. - TurboTax, etc.

Job Market: Tips for entering the job market and navigating career growth in today's economy.

Answer: today's job market is tough because of stagnation - not lots of movement in the job market. people staying in their jobs and limited job growth. however, stay hopeful and keep trying! it helps to be flexible to start in a job that may not be perfect, but a good place to gain valuable experience. the Indeed.com website is a good place for new job seekers. also, using your friend and family network to help you find a job is very effective. in addition to education/training, you can set yourself apart by presenting any experience you have gained in any job, volunteering, school activities, school recognition,, to show you have some experience and valuable skills, etc.

I hope my answers are helpful to you. Good luck!
Thank you comment icon I appreciate this, thank you for the advice. angel
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