SEATTLE (Zillow) — With Father’s Day just around the corner, here are a few personal finance tips compliments of “dad” – mine and likely yours too.
Start saving early
As soon as you get your first job, you should start saving for retirement – ideally, 15% of your gross income every month. Fund an IRA and a 401(k) and learn about the power of compounding interest, which can help multiply the money you save the longer you save it.
Budget, budget, budget
What are your fixed expenses (such as mortgage and car payments)? What are your variable costs (including entertainment, groceries and dining out)? If your monthly expenses exceed income, determine where and how you can cut costs. And then do it. A good place to start: mint.com.
Spend less than you earn
One of the primary reasons people get into debt is because they spend money they don’t have. And once they’re in the hole, they keep digging – deeper and deeper. Did you know that the average household has about $15,000 in credit card debt? Don’t become a statistic! Be disciplined and use credit wisely. This means paying your bills off – in full – each month, and on time.
Home is where the heart is
OK, so you probably don’t want to live at home indefinitely with your parents, but you also shouldn’t break the bank trying to live on your own. Remember, no more than 30% of your income should go toward your housing costs. For an estimate of the monthly costs of homeownership within the context of your monthly budget, use Zillow’s affordability and mortgage calculators.