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What financial advice would you give to younger individuals, in particular students who are striving to be financially responsible?


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Su’s Answer

1) Depending on age, research alternatives to paying for college. I.e. cheaper school, available scholarships, etc
2) Pay down student debt, consolidate, etc ASAP. Debt restricts. It took me 10 years to pay mine off because I thought there is a tax incentive but its not worth it.
3) Put $100 - $500/mo towards a retirement account such Roth IRA or traditional roth in a S&P 500 mutual fund
4) Start saving towards home ownership right away - renting will always be more expensive than buying.
5) Buy something that can generate income, I.e. a duplex if possible. Or somewhere that is up and coming. Your dream home should be your second or 3rd home.

Thank you, Su, for sharing these valuable tips! Tsion K.

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Andrew’s Answer

Hi Tsion, great question! One thing that has really helped me is creating a comprehensive spreadsheet that tracks my current financial situation. This allows me to track balances of money across multiple sources such as checking accounts, saving accounts, brokerage accounts and employee benefit accounts. You may only have money in one place right not, but this can still be helpful just to visualize and track your money. I try to update this every couple weeks. I prefer to manually do this but there are also apps you can use to do this for you (i.e. Mint).

You can also track financial goals in the spreadsheet. For example, if you want to save xxx amount of money each month, you can clearly track progress against that goal. Also, if you are saving up for something large (i.e. vehicle, apartment/house, paying off student debt), it's a great way to develop a plan. The centralized spreadsheet will have all the information available to track and plan your finances!

The other responses to this question have great recommendations. I would reiterate the following:
- Avoid credit card debt as much as possible (the interest rates are crazy high!)
- Be conscious about your spending. A classic example is coffee -- are you better off making coffee for 20 cents per cup or spending 6 dollars at the cafe.
- With money you are able to save, exchange traded funds ( ETFs) are great investments. They are lower risk than buying individual stocks and can compound significantly over time.

Hope this helps and best of luck!

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Stefanie’s Answer

Hi Tsion,
What a great thing to think about early! I can see there are a lot of great points already provided to you so I am going to keep it short and basic/simple :)

Firstly, start with the basic, commit to a saving plan (so eventually it becomes a habit)
If you earn an income, I strongly suggest to make a commitment of x% to be put aside into saving account each month with no excuse. It's even better if you set-up a separate saving account. Up until now, I still have a specific account where it doesn't have direct link to my 'transaction' account. My original logic for this was so that I didnt get tempted to use the money in my saving account. It has worked really well for me up until now :) Depending where you are, you might be able to find bank/financial institutions that offers a bonus interest rate/ a higher interest rate if you don't do any withdrawals to the account (or something similar nature). Look out for those offers !
If the technology allows, set up an auto-transfer for an "x" amount from your day to day account to your special saving account. That way you dont need to think about it every month.

Secondly, track your spending every day for at least for a month (I am sure there are loads of Apps out there to help but I used to literally just write them down on my excel spreadsheet!)

This exercise was a good eye-opener for me as it helped me realise :
1)where all my money went and..
2)small expenses actually add up to not-so-small expenses !
MOST importantly, it helped me assess my habit and helped me identify where I can actually cut back and make/save more!

Hope that helps!





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Itai’s Answer

Being a student is particularly tough. But as a young person with a job, put money in your 401K ASAP. Particularly a Roth early on as you will most likely be in a higher tax bracket when you retire and pull it out. And once you have a strong retirement plan, you can go and buy a house, car, etc with out worrying.

As for students, as you take out loans you should price shop on interest rates. Call competing banks and negotiate. Had I known what I know now, I think I could have saved thousands on interest.

Thank you Itai ! Tsion K.

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Kenneth’s Answer

Hello, Tsion!
As someone who spent over 40 years in financial services and retired three years ago on my own terms, I would like to give you some suggestions:
1. What type of lifestyle do you want? If you are looking to live extravagantly while earning a modest salary, you need to re-think your goals.
2. Don't spend more than you earn, and consider your savings or investments as a regular "expense."
3. Try to make savings and investing as easy as possible. Use payroll deductions or automatic checking account deductions where possible.
4. Make sure you have an emergency fund of, at a minimum, 6 months of expenses before investing.
5. Buying a home is usually a good idea, but don't do it if you don't plan on staying in the home for at least 10 years. There are many costs to incur when you buy a home, and you want to be sure you get those back when you sell.
6. Remember that "location, location, location" are the three most important rules to real estate. As with any investment, you need to ask yourself before you buy how difficult it will be to sell your home or any investment when the time comes.
7. If your employer matches your contributions, make sure to take advantage of this benefit. It will help you accumulate wealth faster.
8. A previous commenter mentioned student loans. I still feel that a college education can be worth it, however, you must take a serious look at how much you will spend on your education versus how much of a salary you will reasonably get when you go into the working world. Student debt can keep you from achieving your dreams because those monthly payments will reduce your available funds for mortgage payments or investments. If money is tight, consider starting with a community college, and then working your way up from there. It's really great if your employer will help pay for your education as part of your benefits, but remember that you will be studying and working at the same time, and there are times that this arrangement can be stressful, especially if you have family responsibilities.
9.Take your credit rating very seriously. A poor credit rating can hinder your chances for a better job or larger credit. Make absolutely sure that you make your payments ON TIME, EVERY TIME. No exceptions. Also, credit card debt can be worse than student loan debt because the interest rates are higher. Make a goal of bringing your credit card debt down to zero. Once that happens, if you are looking to make a purchase, only make it if you can pay off the entire bill when your statement arrives. If you can't do that, ask yourself why? Also, ask yourself do you really need what you are buying?
10. Finally, when you are young, time is on your side. With investments, the compounding of interest and dividends will pay off for you in the long run. Also, the best credit ratings occur when someone has had great credit for many years.
Good luck....and congratulations on asking a really good question. Every great journey begins with a first step!


This is great advice, Kenneth! Thank you for sharing its definitely something I will implement into my personal life. Tsion K.

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Wayne’s Answer

Good day Tsion! It is so awesome that you are thinking about being financially responsible at this stage. Here are a few things I wish I did at your stage in life.

Start earning money as soon as possible. Even young kids can earn money for helping neighbors with yard work, walking their dogs or washing their cars. That kind of entrepreneurial practice can help you get comfortable with making and managing their cash.

Start the savings habit. Getting into the habit of setting money aside when you are young can set up a lifetime of healthy saving. Saving for the future can be an abstract concept for teens, but at least start thinking about saving money and save as much as you can.

Track Your Spending. It is a good idea to establish a relationship with a bank when you are young. In ten or 20 years when you want a loan to buy a house, a long track record with a bank can be helpful. Research the different types of accounts banks offer. Some will charge fees if you do not keep a minimum balance. You should never pay a penny in fees to a bank for any reason.
Open two accounts, a checking and a savings account. Save half of every dollar you get so half goes into checking and half into savings. It is essential to separate your money. You can get a debit card for the checking account. You can now spend money via your debit card rather than cash so you can easily track your spending. The card will also allow you to deposit cash into your accounts at the ATM rather than having to go to a teller every time.

Write down your needs versus wants. Writing down your needs and wants on a piece of paper helps you prioritize how to spend your money. That central tenant of budgeting can help you move closer to your goals.

Think about your goals. Your goals should be specific “Don’t say, ‘My goal is to buy sneakers and hang out with my friends.’ Say, ‘I’d like to go the Maroon 5 concert next year.’ Set goals and be specific. Do some planning on what money you have coming in and what can be set aside to meet your goals.

Make Smart Decisions About College. A smart decision about college can include the decision not to attend the most expensive school or work full time to help pay for it. A smart decision might also be attending a local college for two years and then transferring to a more expensive, prestigious school. It means applying for every grant and scholarship you are evenly remotely qualified for.

Avoid following the crowd. My father used to say things like "If 9 of your friends jump off a bridge, you do not need to be the 10th friend to do something stupid." The thing applies to spending money. ALways remember the needs versus wants and always do what is best for you.

Understand he difference between "good" vs. bad debt. Learning the difference between “good debt” and “bad debt” is crucial to wealth building and debt management. Building a line of credit is vital in today’s society. However, accumulating credit card debt, paying bills late or avoiding paying bills altogether can negatively affect your credit score as well as their future. It is paramount that you understand the value in having a good credit score. If possible, avoid debt whenever possible.

Good luck Tsion!

Hi Wayne, thank you for the insightful advice you've shared and it's information I plan to implement into my personal life! Tsion K.

You are very welcome! Keep shining! Wayne Archibald

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Melissa’s Answer

Hello Tsion! I see many great responses to your question. I'll make this short but to the point. The most important thing you can do at a young age is to find opportunities to earn money, and make a decision to allocate a certain % of earned money to a savings account to begin with. Opening a Roth IRA is a great idea, as there are caps to contribution when you are older and earn more money. When in a job, always contribute the maximum amount to a 401K if offered, or at least to the amount that an employer will match. There are great apps to use for budgeting (Mint, YNAB, Personal Capital), which is a great tool to use when analyzing spending patterns and setting limits for the future. Always pay off credit card balances in full at the end of the month, and never spend more than you earn. The key to my success has always been living under my means, which meant not increasing my personal spending because of an increase in salary. I typically allocate personal spending on things I most enjoy, and make a choice not to engage in material purchases for the sake of showing others how much money I have.

Good luck and know that small steps you make early in your life toward financial freedom will pay off significantly in your future! Patience is key :)

Hi Melissa, Thank you for a great response. I've definitely implemented all the advice I've received so far & will continue to do the same. I love how you stressed on the importance of living below your means! Tsion K.

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Kenneth’s Answer

Hello, Tsion!
As someone who spent over 40 years in financial services and retired three years ago on my own terms, I would like to give you some suggestions:
1. What type of lifestyle do you want? If you are looking to live extravagantly while earning a modest salary, you need to re-think your goals.
2. Don't spend more than you earn, and consider your savings or investments as a regular "expense."
3. Try to make savings and investing as easy as possible. Use payroll deductions or automatic checking account deductions where possible.
4. Make sure you have an emergency fund of, at a minimum, 6 months of expenses before investing.
5. Buying a home is usually a good idea, but don't do it if you don't plan on staying in the home for at least 10 years. There are many costs to incur when you buy a home, and you want to be sure you get those back when you sell.
6. Remember that "location, location, location" are the three most important rules to real estate. As with any investment, you need to ask yourself before you buy how difficult it will be to sell your home or any investment when the time comes.
7. If your employer matches your contributions, make sure to take advantage of this benefit. It will help you accumulate wealth faster.
8. A previous commenter mentioned student loans. I still feel that a college education can be worth it, however, you must take a serious look at how much you will spend on your education versus how much of a salary you will reasonably get when you go into the working world. Student debt can keep you from achieving your dreams because those monthly payments will reduce your available funds for mortgage payments or investments. If money is tight, consider starting with a community college, and then working your way up from there. It's really great if your employer will help pay for your education as part of your benefits, but remember that you will be studying and working at the same time, and there are times that this arrangement can be stressful, especially if you have family responsibilities.
9.Take your credit rating very seriously. A poor credit rating can hinder your chances for a better job or larger credit. Make absolutely sure that you make your payments ON TIME, EVERY TIME. No exceptions. Also, credit card debt can be worse than student loan debt because the interest rates are higher. Make a goal of bringing your credit card debt down to zero. Once that happens, if you are looking to make a purchase, only make it if you can pay off the entire bill when your statement arrives. If you can't do that, ask yourself why? Also, ask yourself do you really need what you are buying?
10. Finally, when you are young, time is on your side. With investments, the compounding of interest and dividends will pay off for you in the long run. Also, the best credit ratings occur when someone has had great credit for many years.
Good luck....and congratulations on asking a really good question. Every great journey begins with a first step!


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