Tips for When You Turn 18
Or Adulting In General
Here are a few must-do things for when you turn 18. Becoming an adult sucks, and can be tough at times so hopefully, these will smooth that transition for you. I'm not an expert, I am just trying to help where possible.
1. Invest your Money
I cannot stress enough how important this is to start as soon as you can. The younger you invest, the more time your money has to grow and the riskier you can be without throwing away your retirement.
I've recently done a TON of intro-level research into the stock market and there are a lot of confusing aspects. For those of you who have no idea (much like myself a few days ago) sign up for a ROTH IRA account. There are a ton of great investment apps and firms to do this through and some of the best and most reliable are linked below.
Be sure to read into whichever one you choose in detail, and then open an account. Once you've done so, just deposit whatever amount you are comfortable with, I'll use $500 as an example. From here you can invest through the ROTH IRA into index funds to help that money grow passively. Make sure to diversify the index funds you choose, but it's really up to you to research the ones you like best. Now let's use that $500 from before to set ourselves up, I'd recommend the following generic outline.
Domestic:
S&P 500 - $250
Large Cap - $100
International:
Total International - $50
Generic International - $50
Bonds:
U.S. Bond - $50
I want to clarify that I am in no way an expert or financial advisor, but this basic premise is a great way to get started. Do some more of your own research and deposit monthly (or more frequently) to grow your money even faster.
2. Get a Credit Card
This one can be scary for some as you have the ability to spend money that you technically don't have. My advice is to use your credit card like a debit card and to only use up to 33% of your total credit limit each month. For example, if your limit is $1000 each month only spend up to $333 using your credit card. Then pay off the full balance at the end of each month to slowly build your credit score.
A higher credit score allows you to get lower interest rates on loans for your future car or house. Without a good credit score, your interest rates will be sky-high and your loan request might not be accepted at all.
I've linked a few credit cards below, but any card that gives you 2-5% cashback is a great option.
3. Find a Job or Career that Suits You
I'm probably going to offend some people here, but here it goes. College is not for everyone. I have had a great experience this far and higher education is a great way to better yourself. But, it is absolutely not the only route to success in finding/getting a job. If you struggled in high school or just hated school in general, college is not going to be a smooth ride. On top of that, 4 more years of schooling build up debt, and this makes no sense for someone who doesn't like school.
Trade school gets a bad rep for some reason, probably due to every adult telling their 2000s babies that college is "the only option". However, what they don't tell you is that after learning the basic skills and getting an apprenticeship you're almost guaranteed a job.
I'm not saying these are glamourous jobs but take a look at the average pay for some generic trades.
Plumber - $60,000
Electrician - $60,000
Paramedic - $63,000
These take far less schooling and money than a traditional 4-year degree and can pay almost double the salary (sometimes even more). There are also far more options than just these basic 3 and of course, pay will differ wherever you are. But, in general, if college doesn't sound appealing this can be a phenomenal option.
There are plenty of other ways to make a decent living that is not through the traditional college route as well. Do your research, find what you like to do then find a way to monetize that activity or service.
4. Buy a Laptop or Computer
This one might sound dumb or self-explanatory, but with how many things can be done online this is very much needed. With a good laptop, you can have a whole career from the comfort of your own home. Students can start and grow their side hustles into full-fledged companies or careers. You can apply for jobs, become an influencer, or just watch Netflix all day. Regardless of what your interests are, you need an internet connection.
If you're looking to start a business or side hustle there are tons of videos on YouTube on how to do so and make money in the process. But sometimes if you're like me, a laptop provides a way for you to do anything you could imagine online. Like I said it sounds stupid, but hey maybe one of you will develop the cure to cancer after researching on your brand new laptop.
Some solid models at various prices are linked below.
5. Set and Stick to a Budget
This one can be very boring and a fun killer, but you'll thank me later I promise. Nobody likes to save money just the same as nobody likes to spend it. A budget will help you to enjoy the fun in life while also saving up enough to support your future.
A good rule of thumb is that you are saving or investing about 20% of your income at a given time. For example, if you make $100 a week you should be saving or investing around $20 each and every week. Of course, this can be impossible at times as life can hit you like a ton of bricks, but the closer you stick to this the more 60-year-old you will thank you for it.
The best way to do this is to have the budget in front of you. This can be done through budgeting apps or a traditional Excel sheet. Regardless of which you choose, make sure you outline all sources of income and all of your expenses so that no surprises come up.
Hopefully, your budget will help you to do and use all of the other tips I listed above as well.
There are of course a lot of other things you should be doing once you turn 18, but hopefully, this gives you a starting point and gives me enough time to write a part 2.