5 Money Moves To Make While Young

Making the right money moves early in life can help you meet your long-term goals and secure financial stability. Here are 6 money moves to make while young.

1. Pay Off Your Debts

There are many different ways to tackle what feels like unmanageable debt. Some people like to go after their biggest debt first and work their way down, while others like to pay in installments. Whichever method you choose, be sure it's realistic and doesn't interfere with your current financial arrangements.

2. Create An Emergency Fund

Your emergency fund can help you manage life's surprises by providing an alternative to borrowing. Typical life events such as medical costs, home repairs, or purchasing a new home can put you further in debt if borrowing was your only option.

Your emergency fund should typically be about 3-6 months worth of basic living expenses. This gives you some security in case you suddenly lose your primary source of income.

3. Create A Budget

Budgeting allows you to make a plan for your money, and helps you maximize the full potential of your earnings. It also allows you to get out of debt in an efficient and practical way by organizing bills and tracking your spending habits.

4. Take Advantage of Your 401k

Most US employers will match 50 cents on the dollar, up to 6% and some will even match dollar for dollar up to 3% on your 401k. This is free money that can be put to good use when planning for the future.

A 401k is also great because if you change jobs, your contributions follow you. You have the option to leave your account with your old employer, or you can roll over to the new employer's plan, but most people typically choose the latter. Alternatively, you can put the money into an individual retirement account (IRA) or withdraw some or all the money. However, withdrawing is generally not a good idea as it will likely bring some hefty tax consequences.

5. Generate Multiple Streams of Income

Having multiple streams of income is always a plus when it comes to reaching your savings goal. Most people wait until they become financially stable to start generating multiple streams of income, but the time you have now is a great time to start. The gig economy is great for this because it allows individuals to make their own schedules. This flexibility can help you prioritize your time so you can be more efficient and maximize your extra income.

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