Money Tips for Young Professionals

So you’ve landed your first professional job, but you’re not making a lot of money – at least not yet. Though you may be a few smart career moves away from your dream job and its rewards, you’re treading water in the present. This is the scenario a lot of young professionals face when starting a career.
Breaking into an awesome career may mean struggling with a low-paying job for a while, but some planning and awareness may help with your long-term financial goals. These money tips will show you how to invest in yourself.
Surviving on a too-small paycheck
If paying your dues (or starting over in a new career) means receiving a smaller paycheck for a while, consider using credit wisely to fill in the gaps. While most financial planners will tell you that credit card debt is a bad thing — and they’re right — credit cards can help you survive when you simply don’t make enough to live on. The key, however, is to use credit only for bills and living costs after you’ve divvyed up your paycheck. Use a card for your needs – not your wants — and you’ll be using credit wisely.
If you need to use credit to cover living expenses like utility bills, food or rent, shop around for a low interest rate credit card. Do your homework, and you may be able to get a card with an initial zero-percent interest rate, provided that you’ve got a high credit score. Failing that figure, shoot for an interest rate that’s 15 percent, or lower.
Think of using this credit card as giving yourself a career loan. You’ll be able to afford a lower-paying job and get great experience while financing your extra expenses for a time on a low-rate card.
Pay off high-interest debt first
When you finally do get a raise or land that dream job, you can set yourself up for financial success by paying down your highest interest rate debt first. Don’t confuse high balance with high interest. Even if you’ve got $500 in credit card debt and $30,000 in student loan debt, your best bet is to pay off the credit card first. That’s because credit cards usually come with higher interest rates, and if that $500 debt comes with a 20-percent rate, you want to chip away at that balance first so it doesn’t grow exponentially.
Start an emergency fund
If you have extra money at the end of the month, sock it away in an emergency savings account. Aim to save four months’ salary, and don’t touch this fund unless you’re in dire straits. Having that emergency fund will be important in the event you lose your job. (It might keep you from having to sell everything you own and move back in with Mom and Dad!)
Begin saving as soon as possible
Even though you may be strapped, saving money is a good habit. Train yourself to save when you don’t have very much extra each month, and saving will be second nature when you begin to make more money. As soon as you can manage it, start saving part of your paycheck by investing in a retirement account like an IRA or a 401K. (In fact, if your employer offers a 401K, you’d be wise to contribute to it. 401Ks are fantastic retirement savings vehicles because they allow you to make contributions that your employer may match. That employer match is basically free money, so don’t pass it up.)
Hang in there
Finally, one of the best money tips for young professionals is a reminder to be patient. When you’re starting a career, you have to work hard to achieve your goals. Do great work, hang in there and in time your employer will likely recognize your hard work by rewarding you financially. You may not have your dream career yet, but you’ll be working hard, steadily building a resume of great experience that will help you move up the ladder of success.