by Chelsea Springli 
Getting into good money habits while you’re young can prevent future consequences. Here are a few money tips that I’ve learned while in my 20s. Learn from my wins and mistakes to help you get started.
Use Credit Wisely
This is a hard lesson to learn, but we should heed the warnings of those several years older than us and be careful about how we use our credit cards. Different generations use credit cards for different reasons. Millennials tend to use credit cards to buy clothes, entertainment, and gas, while older (and sometimes wiser) generations use it primarily for travel and major repairs. Your priorities can also influence how you use your credit card. Don’t get me wrong, having a credit card is a great way to build your credit score, as long as you are doing it the right way.
When I got my first credit card, I was extremely cautious with how I used it and only used it for gas and grocery runs. On the other hand, my husband used his for seemingly everything and built a lot of credit card debt that took a couple years to pay off. We have different priorities now and only use it for gas, when we need a secure payment method, and emergencies. We’re both confident now that we’re using the card in ways that align with our needs and goals.
Slow Down
Credit inquiries can negatively impact your score up to five points, which is especially damaging to a young adult who doesn’t have a long credit history. Several inquiries at the same time can be a warning sign that you might be trying to take on more credit than you can handle. A good rule of thumb is to shop around before buying something that you plan on taking out a loan for. Once you’ve made your final decision, then you can have your credit pulled to make the purchase.
Recently, my husband and I needed to buy a new car. We quickly decided that we’d need a car loan for our purchase. We looked online at rates and talked to our salesman about their financing options. I went into the dealership knowing that I wasn’t going to apply for a loan until I did more research. After a couple days, we decided to apply for preapproval with Alltru. Because I took the time to research my options, we got our car for less than we thought with a low rate loan that we could afford.
Build Credit
Your credit is the number-one key you have to financial freedom, so build it wisely. There are numerous ways to build good credit, including paying your student loans on time, paying your car loan on time, and diversifying your loan types (credit cards, installment, mortgage, etc.) If you don’t know where to begin, make an appointment to come into an Alltru Credit Union branch for some one-on-one credit counseling with our experts.
Begin Investing
There’s a big notion that only people with a lot of money should invest in long-term saving. Even though you most likely won’t get rich overnight, it’s never a bad idea to have a long-term saving plan. Just taking a little bit out of each paycheck and investing it into a High Yield Online Savings account or a getting a Certificate of Deposit will help you in the long run. Some employers offer 401k or Roth IRA matching, meaning that they’ll deposit the same amount of money that you do into your retirement account through the company.
When I was first out of college, my employer offered a retirement matching plan up to a certain percentage of my income. Even though I was nowhere near retirement at age 22, I contributed as much as I could to get the highest match possible. The deposits into the account were withheld from my paycheck. This way, I didn’t miss the money from my paydays but had a stash on money growing for me without even thinking about it.
Save More
Like most young adults, I too have fallen victim to wasting money on “the short term.” You know, things like going out to eat or going to the movies, which for the time being is great. As life happens, you’ll come to realize how much you need that savings account for kids, emergencies, or your retirement. I’m not saying that in your 20s you should stay at home every night, but set some boundaries and make sure you’re saving as much as you’re spending.
A great way to start saving is to create a $1,000 emergency fund. While $1,000 seems like a lot, it will come in clutch during an unexpected situation and save you from high interest debt. I know from experience that you can budget to save a few hundred dollars in a separate savings account from each paycheck until you reach your goal. It’ll only take a couple of months.
Start Wise Money Management
“Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it ensures the possibility of satisfying a new desire when it arises.”
— Aristotle
So, the next time someone from an older generation gives you some financial advice, or even someone your age who has a few mistakes and wins under their belt, just take a second and listen to them. They may be telling you from experience
