21!!!, Welcome to Adulthood, you probably feel like you can do whatever you want. Now, do that wisely.
Continue savings, setting budgets as expenses change and manage your credit (see my other blog posts). The only biggest change becoming 21 in the financial world is you start investing. There are a lot of options to invest your money so it can be an overwhelming process. One of the easiest way to start investing is in a 401K program and buying stock through your employer. 401K is retirement saving contribution which is deducted from your paycheck before taxes. Most employers’ offer 401K and stock options, and some companies will match a percentage of your contributions. Check with your employer regarding their 401K programs, if they offer these programs, ask percentage they will match, and if they offer a discount on their stock.
Apply for 401K program through your job
- If your employer matches, at least contribute the max % your employer matches.
In my experience working at Microsoft prior to 2014, they match 6% of my contributions and the discount was offering the lowest stock price within a 3 month/Quarter timeframe. I called these benefits “free money”, if I contributed to my 401K my company would give me money toward stock options. For every $100 which I contributed in my 401K my employer would contribution $6 toward the purchase of the company’s stock. $6 doesn’t sound like much but imagine if $6 appeared on the ground for every $100 you spent would you walk passed it? If your company offers a discount in their 401K program, think of it like on opportunity to purchase items at wholesale prices verses retail prices – would you pass that up? Overall the years, this has been very beneficial buying stock at a discount, tax saving contributing to 401K and my financial stability , due to the return on my investments (ROI). I’m not a financial advisor so I won’t go into all the information that investing has to offer however 401K is the easiest process to do until you get more knowledgeable.
Money will move your world, decide what world you want to live in…for the rest of your life going forward.