As you enter into your twenties, you’re faced with building a life of your own and learning how to develop a strong financial profile. Unfortunately, it’s common for young adults to end up in unpleasant financial situations. Before you find yourself needing to consult debt relief lawyers, this guide can help you make a few smart money moves.
4 Suggestions to Help You Maintain Financial Freedom
1. Create an Actionable Budget
Every adult, from a factory worker to a lawyer, has to build household budgets to help them meet their financial obligations. A budget should be flexible and adjusted periodically to account for changes in your financial situation. While the budget’s primary goal is to help you make payments to your creditors on time, it will also find better ways to use your money.
2. Start a Savings Account
Your budget should allow you enough of a cushion to start a savings account. As you begin building a life for yourself, you’ll be faced with financial, medical, and legal matters that will require you to act quickly. While consulting professionals, such as lawyers, can help, you should also have the savings to draw upon to cover emergency expenses. You should put away a minimum of 10% of your earnings from each pay period, or keep a savings balance equivalent to 20% of your home’s worth.
3. Begin Building Credit
There are few things you can do in life that don’t require a strong credit rating. You can begin to build credit by getting a secured credit card, which is linked to a checking account and requires you to maintain a minimum balance. Your credit limit will be equivalent to your required balance and, by using the card and repaying your balance on time each month, you’ll be able to begin creating a good credit score. Even if you have already sought debt relief with the assistance of a bankruptcy lawyer, a secured credit card is a good way to rebuild your credit.
4. Start an Estate Plan
This is also a good time to start planning for your retirement. A portion of your savings should be directed to an Individual Retirement Account (IRA) to help you invest your money and build wealth for your retirement. Along those lines, an estate planning attorney can help you set up a will, power of attorney, and other legal documents that will help you protect your assets and pass them onto your loved ones.
It’s easy to fall prey to unscrupulous lenders and find yourself in a bad financial position, but it’s up to you to act to resolve the situation. Working with the lawyers at Watson Law Firm of Harrison in Harrison, AR, will help you explore your options, so you can build a strategy for resolving your debt problems. Backed by more than 35 years of experience, they offer private and skilled legal services that you can trust. To schedule an initial consultation, visit their website or call (870) 704-4037.