Some Thoughts on Financial Planning for Young People


As a young adult, you might feel like there’s no time to think about finances. You’re still living in your parents’ house, after all! But the truth is that if you start saving and investing now, you’ll be able to retire early (if you want) and have a much more comfortable lifestyle than your peers who don’t plan ahead explains Vincent Camarda. Here are some thoughts on why financial planning matters for young people—and what steps they should take now:

Start saving early

Start saving early. The sooner you start saving, the easier it will be to save more.

Save as much as possible. You’re never too young to start saving – and there are many ways to do so, including working part-time or taking on a summer job, starting a side hustle (even for just a few hours per week), and other small steps like skipping cable TV and using public transportation instead of driving whenever possible.

Don’t spend money on things you don’t need (especially if they can be done without).

Prioritize paying off debt

It’s important to prioritize paying off debt. Debt, such as credit card and student loan debt, is much more expensive than the interest on a mortgage or car loan. Student loans are usually tax-deductible and have an extended period of time for repayment, which makes them more manageable for many people.

Don’t invest too much in your employer’s stock

You should never invest too much in your employer’s stock. If you are lucky enough to work at a company that has a healthy business and is doing well, then it may be worth considering investing some of your money there. But be careful: don’t put all of your eggs in one basket.

You should also consider diversifying by investing in different types of securities such as bonds, real estate and other assets.

Build an emergency fund

When it comes to financial planning for young people, there are a few things that you should make sure you have in place before you start investing or saving for retirement. The first is an emergency fund.

You should be able to save up at least three months’ worth of living expenses before moving on to the next step. The more money you can save, the better off you’ll be if an emergency happens. You could use your savings account as an interest-bearing one, or even invest in stocks with a low risk profile that won’t fluctuate too much between now and when you need the money (but remember: no guarantees).

Taking control of your finances early will make a huge difference in the long run.

It’s often said that the earlier you start saving, the better. That is true because your money has more time to grow.

This means that you can invest less money to achieve your goals and still be just as successful. For example, if you have twenty years left until retirement and need $1 million in savings by then, it may not make sense for you to save $500 per month now if interest rates are low and aren’t likely to rise significantly before then.


As we’ve seen, starting early and taking control of your finances is the best way to ensure that you can retire comfortably. If you follow some basic principles like saving regularly and prioritizing debt repayment, it will not only help with future financial success but also give today’s young people peace of mind now.

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