- June 18, 2024
- Posted by General Electric Credit Union
Smart Saving Strategies for Young Adults Starting Their Career
Congratulations! You’ve just landed your first job, and now it’s time to navigate the world of personal finance like a pro. While it’s tempting to splurge after receiving your first few paychecks, establishing smart saving habits early on can set you up for financial success in the long run. Whether it’s building an emergency fund, saving for retirement, or planning for future goals, here are some valuable saving tips tailored to young adults entering the workforce.
Start your career—and savings—off on the right foot!
1. Create a budget
The foundation of any successful saving strategy starts with a budget. Take the time to track your income and expenses to understand where your money is going each month. Allocate a portion of your income toward savings goals, such as an emergency fund, buying a new car, and other financial objectives. This is the best way to ensure you can enjoy your earnings, too! With complete visibility into your finances, you’ll know exactly how much you have leftover for fun on the weekends, an investment piece for your career wardrobe, or a relaxing weeknight in with your favorite food delivery.
- General Electric Credit Union’s (GECU) Money Management tool makes building a budget easy. The intuitive dashboard helps you visually see where your money is going, track goals, and so much more.
2. Emergency fund
Life is unpredictable, and having an emergency fund can provide a financial safety net when unexpected expenses arise. Whether that be a flat tire, a broken arm, or a power outage spoiling a recently stocked fridge, these funds will help you rebound with greater ease. Aim to save at least three to six months' worth of living expenses in a readily accessible account, such as a high-yield savings account.
3. Automate your savings
Set up automatic transfers from your checking account to your savings account each payday. By automating your savings, you’re less likely to spend the money before putting it aside for your financial goals. The rule of thumb for saving is 20%, but you can alter this depending on your unique needs or goals.
4. Take advantage of employer benefits
If your employer offers retirement savings plans such as a 401(k) or similar, enroll as soon as possible. Contribute at least enough to take full advantage of any employer matching contributions, as this is essentially free money toward your retirement savings.
5. Explore interest-earning savings accounts
When it comes to saving for short-term goals, consider opening a high-yield savings account. These offer higher interest rates compared to traditional savings accounts, allowing your money to grow more quickly over time.
If you’d prefer a more hands-off approach to saving, a certificate will also give you access to interest earnings but keep your funds locked away for the duration of the certificate’s term. With terms ranging from a few months to several years, you can weigh your options with the help of an online savings calculator. While a longer term will yield higher interest earnings, it’s important to choose a term that makes sense for your financial situation. Don’t opt for a term length that puts a strain on your budget.
By incorporating these saving tips into your financial routine, you’ll be well on your way to building a solid financial foundation for your future. Remember, the key to successful saving is consistency and discipline. Start small, stay focused on your goals, and watch your savings grow over time. Your future self will thank you for it! Career-focused savers will appreciate the interest-earning account options offered by GECU in addition to a range of convenience-boosting member perks, like:
- Free Online Banking and a top-rated mobile app1
- A wide network of 100,000 free ATMs for quick access to cash2
- Zelle®, for a fast, safe, and easy way to send money to friends, family, and other people you know and trust, wherever they bank3
- Early Pay, so you can enjoy your paycheck and other ACH deposits up to two days early4