Page 24 - BusinessWest July 7, 2025

Stick to the Plan
Financial Literacy Is Key for Young Professionals
BY AMANDA GOEWEY
As many recent college, trade school, and high school graduates
settle into new jobs, their pockets may be feeling a bit heavier
with money from the first few paychecks. It can be tempting
(and exciting) to spend this newfound money on summer fun, but
young professionals should have a plan for these paychecks. Under-
standing the options for what you can and should do when the money
starts flowing is a great place to start.
Make a Budget and Stick to It
Setting a budget is critical for young professionals who are often
balancing myriad expenses, like school and car loans, rent and utility
payments, entertainment, and more for the first time. A budget is a
plan that helps track and manage expenses to keep spending within
your limits and help build your savings.
Budgets are built on a simple equation: your income minus your expens-
es equals your monthly net. To be financially stable, your expenses must
be less than your income — that’s how you know you’re living within your
means. If your expenses are equal to your income, you will be living within
your means, but you will have nothing left over for savings.
Create an Emergency Fund
One account everyone should have, regardless of age or career stage,
is an emergency fund for unexpected costs like vehicle and home repairs,
medical bills, or vet bills, if you have a pet. It’s critical to consider this fund
as a part of your overall monthly budget.
Setting a specific goal for an emergency fund will help determine a
reasonable timeline for reaching it. For example, if your goal is to build a
“Setting a budget is critical for young
professionals who are often balancing
myriad expenses, like school and car
loans, rent and utility payments, enter-
tainment, and more for the first time.”
$2,000 emergency fund in one year, you’ll need to allocate about $167 per
month to that fund. Being consistent in saving that amount every month is
critical to achieving the goal. Consider setting up a direct deposit for the
amount needed from your paycheck.
Pay Off High-interest Debt
High-interest debt is ever-changing alongside loan interest rates; it’s gen-
erally accepted that high-interest debt is anything above the student loan
or mortgage rates. Those interest rates are assigned when you borrow or
receive money in advance, also known as credit.
So, what should you do if you’re carrying this type of debt? While simply
paying it off is the best answer,
actually doing it isn’t quite that
straightforward, but should be
Literacy
Continued on page 27 >>
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24 JULY 7, 2025
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