10 quick tips to good personal finance

The Hartford Financial Group offers these 10 quick tips to help young adults get started on the road to good personal finance.

1. Make a plan. Write down your net worth, listing everything you own and owe. Prepare a budget. Once you see it on paper, take control and make changes so your money is doing the most good for you. Write down your goals and review them quarterly or yearly.

2. Start saving for retirement in your 20s, as soon as possible. Small consistent savings in your 20s will compound and have a much greater impact than waiting until your 30s or 40s. Remember, a person who doesn’t save in his or her 20s might have to save four times as much to catch up.

3. Remember that interest rates put money in your pocket two ways. When investing, a higher rate of return will accumulate significantly over your lifetime. When paying interest for borrowing, shop around because a lower rate will have more significance than you think, saving you money over time.

4. Eliminate your high-interest debt as quickly as possible. This includes credit cards or any other interest that seems considerably higher than what you are earning on your savings.

5. Establish good credit. Pay your bills, including your student loans. Bad credit can prevent you from buying a house or car, or going on to higher education.

6. When evaluating a job opportunity, consider the training offered and advancement opportunities, as well as where the job is situated and the cost of living in that region. In addition to salary, look at the benefits being offered to get a full picture of the total compensation package.

7. Make sure you are covered by health insurance. Take the plan offered by your employer, even if there is a cost. Resist the temptation to save a few dollars. It is one of the most important financial decisions you can make.

8. Join your company 401(k) or retirement plan and make voluntary contributions of at least 4 to 6 percent of your income. The cash you save immediately in taxes, plus the compounding of that money over time, make this a wise investment. In addition, many companies may match some of your contributions, giving you additional “free” money.

9. Minimize your housing and auto costs during your first year after graduation to give you time to accumulate funds and develop a rhythm for your personal finances. If possible, live at home for a year or rent a modest apartment, perhaps with a roommate. Buy an economy car or use public transportation. Try to keep your housing costs to no more than 30 percent of your gross income.

10. Try to keep an emergency fund of 3 to 6 months’ living expenses in the bank or money that is easily accessible in case you have unexpected needs or lose your job.