I’m starting my first job
Your first step into the work world is an exciting time, but also one of the most important periods to plan for your financial future. Retirement may seem like a long way off, but take this opportunity to leverage your most valuable asset - time.
Saving for retirement – if you don’t have a company sponsored retirement plan at your work like a 401(k), you can open an Individual Retirement Account (IRA) on your own. You’ll get a sizable tax deduction and set yourself up for life after work. But you need to start early. Here’s why. Let’s say you’re 22 years old. You put away $50 each month and earn 8% in the market until you’re 65. During that time, you would have put away $25,800. But because of compounding interest, you would have accumulated $213,570 by the time you turned 65. Now let’s say you waited ten years to start saving, but you double what you put away to $100 each month. By the time you were 65 you would have put away $38,400 ($12,600 more) but your account would be worth only $189,152. Even though you put away twice as much each month, your total still can’t make up for that lost ten years of compounding interest.
Borrowing – Overextend yourself on a car loan and you could find yourself working just to keep up with the payments. Visit our online calculators to understand your budget and discover the loan that works best for you, rather than the other way around.
Managing credit – Having a credit card can give you flexibility, help you build your credit score, and can even offer rewards. At the same time, charging purchases beyond what you can afford can lead to spiraling debt, so be sure to use it responsibly.
The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.