Put money in a savings account to build an emergency fund. You should aim to have three to six months of living expenses in savings and easily accessible (i.e. not invested) in case the unexpected happens (such as job loss, medical emergency, car wreck).
Three to six months of living expenses might seem excessive or unreachable, but all you need to start is a small amount. If just $5 from each paycheck goes to the fund, that’s okay. Something is better than nothing if you find yourself out of a job.
It’s about building an important habit of saving. Just be sure to increase that $5 as paychecks increase.
3. Contribute to your employer’s 401(k)
Except under certain circumstances, always contribute to an employer-matched 401(k) or similar retirement fund.
By waiting to do this, or failing to do so at all, you are leaving hundreds to thousands to tens of thousands of dollars of free money on the table.
Pensions are starting to be less common so a 401(k) is often the preferred way to start saving for retirement.
4. Don’t accumulate credit card debt
Credit cards are an effective tool for building credit history and even earning some lucrative rewards, but be careful. It’s tempting to buy more than you can afford and this will only lead to you spending more money because of the high interest that accumulates on your charges. If you insist on using a credit card it’s best to make sure you pay off the balance in full each statement.
