Financial Freedom and Self-Discovery Guide
Navigate the challenges of debt, build a robust emergency fund, and invest in a brighter future. Explore career paths, embrace self-discovery, and unlock the keys to a fulfilling life at 18 and beyond.
Unlocking Adulthood: Financial Wisdom and Personal Growth Tips for 18-Year-Olds
I remember when I turned 18, all the way back in 2013. Everyone was throwing their phones at the wall from playing flappy bird, Instagram used to look like this and Iphone just came out with their latest 5S. And with only being in America for 6 months at that point, the American money system was the furthest thing from my mind. I want to share four crucial tips that I wish I had known during those formative years. Stick around, and I’ll throw in a bonus tip that might just reshape your perspective on navigating adulthood!
Mastering Finances and Self-Discovery: Essential Tips for Your Journey into Adulthood
- 1. Avoid Debt like the Plague: Stay away from any form of debt as it were the 1300s and debt is the black plague. And by all, I mean all debt. The last thing you need as an 18-year-old with little to no income is a loan or a credit card balance. Especially, with a 25% interest rate and carry that balance till 2035 like 49% of Americans. If you’re reading this, you are already trying to be different and take control of your finances. So don’t do as the rest of the mainstream does. Make cash purchases and only buy things you can pay in full. There’s a whole different mental aspect of swiping a card for $200 or handing over 10 $20 bills.
- Build an Emergency Fund: Start some kind of starter emergency fund. If you’re living with your parents, it might be something as simple as $500-$1000. Just to get you into the habit of saving money for later and not fall into the trap of living from paycheck to paycheck like 62% of American’s do. If you are already living on your own then you might need more of a real emergency fund which would equal 3-6 months of expenses. For example, you take the bare minimum that you need to survive which is housing(rent, utilities), transportation(gas, insurance, since were not going to have a car payment), food (basic groceries) take all that into account for the month and multiply by 3-6. And that’s your emergency fund.
- Invest in a Roth IRA: At Kurpas Financial we’re BIG on investing. If you have any form of income, open a Roth IRA for yourself I personally use Charles Schwab for mine. This is basically a cheat code for growing your finances. When it comes time to withdraw it at retirement age, you don’t have to give the government a penny of it, because it will be tax free. If you only put away $100 a month into it starting at 18 and wait to withdraw it at retirement at 65, assuming an average of a 10% growth rate (which the S&P500 was done historically) you’d have 1 million TAX FREE! And that’s only investing $100 a month!
- Plan Your Career Path: Sit down and try to figure out what you want to do with your life. Figure out what you’re good at and passionate about to figure out a career path for yourself. Then figure out if you want to go to college or not, just because all your friends are going to all these out of state schools you don’t need to follow them. Maybe you’re more of a hands on person and a trade school would be more appropriate for you. At trade school you’d spend 2 year in an apprenticeship and go straight into your career field skipping all those unnecessary student loans that American’s so struggle with.
- Invest in Yourself: We’ve already talked about investing into your roth IRA, but really the most important investment you can make at this age is into yourself. That can look like getting and education, learning a trade, reading books on different subjects that interest you. Growing emotionally, spiritually, or getting counseling or therapy from past traumas as we all grew up under different circumstances.
Closing Thoughts: Embrace Your Journey into Adulthood with Confidence and Purpose
As we conclude this journey into financial wisdom, finances, and personal growth, remember that your path to adulthood is uniquely yours. Embrace the lessons, face the challenges, and celebrate the victories. Whether it’s conquering debt, building a robust future, or investing in your personal development, each step forward is a stride toward a fulfilling life.
