Over the years, financial expert Erica Holland has shared enough money advice here to count as two semesters-worth of credit towards a business degree. Between credit scores and investing and paying off debt and retirement, she’s covered a lot of ground, and many of her  lessons have inspired us to rethink the way we approach our finances. Today, however, we wanted to focus on five big-picture practices that are necessary for shaping a healthy financial future. So here you have it, our guide to achieving total grown up status.

photo via mochi things

image via elle

1. The Time to Start Saving is Now.

As a young person, it’s easy to shift your money mindset toward, “I’ll take care of it later. I have my whole life to save.” This is a dangerous approach because the more you save now, the more time your nest egg has to grow exponentially. Compound interest is a powerful tool that literally turns time into money as you earn interest on top of interest. Let’s put it this way: if one woman starts saving at age 25 and another starts at age 35, the younger woman can have double the retirement savings at age 65.

Click here to read about the top money mistakes women make.

photo from urban outfitters

2. Pay Your Credit Card Bill. Seriously.

Credit card debt will sabotage your financial health. There’s just no getting around it. Interest rates on credit cards are sky-high, and the longer you owe money, the more it snowballs.

Back in the good old days, being tardy to class was a harmless offense. But in the real world, being tardy on your payments is costly in more ways than one. Not only does a late payment result in extra fees and interest, but it can seriously hurt your credit score.

If you are over 30 days late, the record will hit your credit report and stay there for up to seven years. Since 35% of your credit score is based on your payment history, this is especially harmful. So, avoid being late at all costs. Set your payments to autopay every month to remove any risk of forgetting.

Click here to find out what else could be unexpectedly hurting your credit score.

photo by sandra semberg

3. When it Comes to Saving for Retirement, You Have Options.

Most of us are semi-comfortable with 401(k)s, but for some reason, hearing the words “Roth IRA” adds a whole new level of intimidation. It’s no secret that millions of successful women are missing out on this effective way to save for retirement because they don’t know how it works. We’re on a mission to fix that! Armed with some Roth basics, we can step up our retirement games and hit the beach earlier than we ever expected.

photo from urban outfitters

4. Need a Financial Detox? Stick to Cash.

Swiping a credit card is easy… dangerously easy. Most of us are guilty of spending frivolously because a credit card eliminates the emotional tug of cash leaving our pockets. If you’re prone to overspending every so often, challenge yourself to use cash for a week. How does it feel? Did you spend less than you did the week before? Having a finite resource makes us more thoughtful and prudent in our spending. Using cash will get you back in the mindset of treating your credit like it’s limited.

Read more financial detox tips here.

photo via the fashion medley

5. Everyone can—and should—be budgeting.

There’s something about a budget that feels so restrictive. Between careers and personal obligations, our lives have enough structure. Who wants to pile on even more rules? The thing is, the right kind of budget should empower rather than confine you. It should allow you to spend money on the things that make you happy and still meet your financial goals. Click here for five simple steps to start building your budget.

4 comments
  1. 1
    Holly | July 31, 2018 at 4:12 am

    This is such an insightful post and so useful for us youngun’s who are just starting out with the financial world! It can be so overwhelming, but I have already decided to start saving because it is my dream to own my own home and I know that isn’t going to happen if I spend, spend, spend. Thanks so much for the advice, I can’t wait to take give some of these tips a go!

    Holly from The Art of Being Holly xo

    Reply
Leave a Reply

Your email address will not be published. Required fields are marked *