Fall Local Living 2023

4—Fall Local Living 2023 5 Practical Tips Young Adults Can Learn to Achieve Financial Independence Y oung adults entering the workforce for the fi rst time must learn many new skills, but few will be more important than e ff ec- tive money management. That one skill often can be a key factor in young adults achieving their fi nancial goals and dreams. Smart money management skills and fi nan- cial literacy are vital to fi nancial indepen- dence. Studies have shown that people with a basic understanding of money manage- ment are able to save and invest more, have less debt, and accumulate more wealth than those who do not. What many young people often overlook is that they have an invaluable resource – one located in their community – to help them become better fi nancial stewards. It’s their local credit union. Financial institutions like Ascend Federal Credit Union, with our mem- ber-centric focus, are an ideal partner to help young adults fi ne-tune their money manage- ment skills. Here are fi ve ways Ascend can help young adults become smarter about managing their hard-earned money: 1. Creating a savings plan The fi rst step in the journey to fi nancial in- dependence is creating a comprehensive sav- ing plan. Consider it a fi nancial tool to cal- culate and track your spending on essential needs (rent, food, gas/auto maintenance and insurance, utilities, etc.) and discretionary wants (entertainment, fashionable clothing, dining out). Determine savings goals fi rst and allocate what is left over for expenses. Ascend o ff ers free, online fi nancial tools to help you manage your money. 2. Establishing an emergency fund One thing is certain in life —you will face an unexpected cost that could signi fi cantly reduce your hard-earned savings. An emergency fund can be a fi nancial lifesaver to help you avoid us- ing a credit card or taking out a loan to pay for medical emergencies or auto or home repairs. Most experts recommend setting aside three- to-six months of living expenses as a fi nancial safety net. If that is out of reach for now, then set a goal of $1,000 and build from there. 3. Building a good credit score (and avoiding credit card debt) Your credit score represents how lenders view your ability to repay a loan. It is also an important factor in renting an apartment or obtaining a loan or mortgage at a favorable interest rate. To build a good credit score, al- ways pay your bills on time. If used properly, a credit card can be a useful fi nancial tool to pay for unplanned expenses, but it’s imper- ative that you use it wisely and always pay the entire balance each month. Within its digital banking platform, Ascend provides a free credit score monitoring tool that en- ables members to obtain a comprehensive credit analysis without impacting their credit score. 4. Providing strategies to start saving money now The wealth-building power of compound interest cannot be overstated. Albert Ein- stein famously called it “the eighth wonder of the world” and “the most powerful force in the universe.” The sooner you start saving, the more time your money grows and com- pounds over the years. Whether it is to make a down payment on a home or pursue other passions, developing a disciplined approach to saving each month can turn those dreams into reality. If available, young adults should also participate in their em- ployer’s defined contribution plans, like a 401(k), especially if the company offers matching contributions – which is essen- tially free money that can help you accu- mulate wealth much faster. 5. Offering financial education, wealth-building resources Most savvy investors are lifelong learn- ers and students of the financial markets. Young people should set aside time to learn about personal finance and invest- ing. Countless resources are available (books, online classes, podcasts, work- shops/seminars), many of which are free. Ascend also offers a full range of financial education courses available for free on its website that teach everything from finan- cial basics to retirement investing. Mastering money management empow- ers young adults and helps them take control of their finances, now and in the future. By following these tips, young adults can transform their lives and build a bright financial future. Not an Ascend member? Visit ascend. org or stop by any of our 27 Middle Ten- nessee branch locations to learn more.