When speaking with Matthew Yale, a financial adviser with Gate City Financial Services, he made it clear that one of the most prevalent problems when younger adults are dealing with money is that they may not understand debt, its different types or exactly how their credit cards may work. It is common to see many people carry balances on their credit cards from one month to the next. Carrying a balance over and paying the minimum balance due doesn’t seem like a large expense, but the interest adds up and far more is paid for goods in the long run.

There are many different types of investment accounts, but great accounts that benefit younger people are Roth Individual Retirement Accounts, or Roth IRAs. Speaking about investments in general, Yale said it’s often a wise decision to make your investments automatic in your 20s.

“You don’t think about it. The investing just happens. Set it and forget it is a wonderful thing early in your investment life. Just like your monthly Netflix bill, you won’t notice the money going into your investment accounts after a few months.”

A budget is likely the most useful tool for anyone when it comes to finances for a young person. “Spend less than what you make, and find areas where you can reduce spending” is Yale’s “keep it simple” tip for a budget. A budget allows you to do a daily, weekly, or monthly review of the money coming into your account and the money leaving it. Budgeting isn’t something that needs to be overly complicated, but it does need to be consistently tracked to make sure your spending habits are in line with your goals. Setting goals would be the driving factor behind decisions you make, so ensure your goals are set to help keep your money habits in line. They don’t have to be big goals that take a significant amount of time or effort to achieve.They can be simple goals with short timelines and even so, build the framework of successful habits.

The concept of S.M.A.R.T. goals comes to mind. S.M.A.R.T. is an acronym that stands for “Specific, Measurable, Achievable, Relevant, and Time-Based.” Make sure the goals you set fit these criteria and you’ll find yourself achieving measurable success when you reach one. An example would be saying, “My family needs to limit eating out to two nights per week and put any money saved into an account. We can take any money saved to pay off our credit card.”

When speaking about investment accounts for retirement, Yale mentioned IRAs, or Individual Retirement Accounts. He said that of the types of retirement accounts, the Roth IRA is probably the best for young people. The Roth IRA allows an investor to pay taxes on deposits as they are made instead of taxing it when it’s withdrawn. The goal is to pay less taxes on your investments, so the initial investment is taxed instead of the, hopefully, larger sum that gets withdrawn. One thing to remember about a Roth IRA is there is an annual limit on what can be deposited. According to the IRS, the limit in 2024 for those under 50 is $7,000.

The biggest thing with investing for retirement is the sooner you can begin, the better. Compound interest can work to the investor’s advantage to significantly increase their returns if they begin early.

An emergency fund is also crucial to protect people from needing to withdraw from savings, or be flat broke after an emergency. Emergencies can be a wide variety of things — medical expenses, vehicular expenses, home appliance repair or replacement, job loss, pets or anything else that could apply to one’s situation. According to Yale, three-six months of expenses is a good place to be with an emergency fund for someone in their 20s.

Yale also discussed employee benefits. He said if an employer matches contributions to a retirement plan, employees should take advantage of this and invest through a 401k or other plan. This brings to mind insurance. He explained that people in their thirties are often facing some of the more “messy” parts of financial life. For those with a spouse and kids, it is important to consider life insurance in case the worst should happen. Yale raised the question, “Are things taken care of?”

Someone in their 30s should also be working toward tackling “bad debt,” such as student loans, credit cards, etc. Your 30s can be a time to learn from your less financially savvy past self and position yourself better for later in life.

For those in or approaching their 40s Yale mentioned retirement investing again. He said “there is still time” and emphasized that a “late” start is better than no start when it comes to preparing a nest-egg for retirement. He stressed that your 40s are a time to strive toward hitting the annual limit on retirement accounts, after other debts have been diminished.

Tracking your progress is an important factor when considering goals. The “M” and the “T” in S.M.A.R.T. goals means that you should be able to measure progress toward your goals over periods of time. If you’d like to have a certain amount of debt paid off or a certain amount set aside in six months, ensure you are tracking your progress to meet any deadlines you give yourself. This can apply to any part of your finances, be it investing, saving, paying off debt, or another aspect of a healthy financial circumstance.

“Don’t keep up with the Joneses,” Yale said, stating the average new car purchase costs hundreds or near a thousand dollars each month in payment. Keeping in debt by consistently upgrading vehicles is a significant burden on an account. Consider a slightly older or used model instead.

This conversation also touched on the social media aspect of financial wellness. According to Yale, “all we see in today’s world with social media is the highlights,” which is fair. For those with serious financial goals, it may be a good idea to not worry about what others may think of the car they drive or the accessories they have. It may be time to simply strive towards the goal and once you reach it, treat yourself.

Finally, Yale said if you aren’t sure where to go or what to do, professional assistance is available. Financial advice isn’t always necessary, according to him, but he said “if you need help, there are tons of great financial advisors and resources in this area that would be more than happy to help you in your financial journey.” He emphasized that these goals aren’t hard and fast for different age groups, and different people may reach different goals at different times in their lives.