Financial Planning for Young Adults: Build Your Future with Confidence

When individuals are young and get out of their parent’s house, financial management is crucial for the achievement of individual and occupational objectives. This is why at Farmers State Bank we are dedicated to help young adults establish a strong financial future. That is why our services and materials are more helpful in managing the often confusing issues of money and its allocation. In this guide, you will learn what you can do to take control of your financial life and become financially independent.

Setting Financial Goals

It is important to ensure that there is the formulation of right financial objectives, which is the initial step to attaining financial sustainability. Whether it is for college tuition, a car, or an emergency fund, it is important that young adults have something to strive for in order to keep them on track. Farmers State Bank provides the saving accounts with the goals that can be achieved throughout the year in order to help the customers. Our financial advisors are also always willing to sit down with young adults and plan for realistic goals and realistic saving strategies.

Types of Financial Goals for Young Adults:

Short-term goals:

Saving for an emergency or for a holiday

Medium-term goals:

Purchasing a car or making payments for certification courses

Long-term goals:

Paying for retirement or buying a house

When the appropriate goals are set, young adults are able to begin establishing a plan to live by to help them make better financial decisions.

How to create an effective budget that you are willing to follow

One of the most popular strategies to control the income, expenses, and savings is a budget. Young people may, therefore, find it easier to create a budget that is realistic and easy to implement to ensure that they do not get into a lot of debt. Farmers State Bank also provides ways and means on how to create a budget, how to check on the expenses and how to change it anytime.

A basic budget divides income across essential categories, including:

• Fixed expenses (e.g., rent, utilities, insurance)
• Variable expenses (e.g., groceries, transportation)
• Savings (for both short- and long-term goals)

Our online banking platform also includes budgeting features that provide insights into spending patterns, helping young adults make informed choices about their finances.

Understanding Credit and Building a Positive History

Building a good credit history is vital for young adults, as it impacts their ability to secure loans, rent an apartment, and make major purchases in the future. At Farmers State Bank, we offer credit-building products and resources that guide young customers in establishing and maintaining a positive credit history.

Key tips for building credit responsibly include:

• Making all payments on time
• Keeping credit card balances low relative to credit limits
• Avoiding unnecessary credit inquiries###

For those new to credit, our team provides helpful guidance on starting with a secured credit card or a student credit card, both of which can help establish a strong credit history without the risk of overspending.

Starting an Investment Strategy Early

Investing early can create significant financial advantages over time due to the power of compounding growth. For young adults interested in growing their wealth, our investment advisors can help identify options tailored to their risk tolerance and financial goals. Farmers State Bank offers a range of investment accounts, including retirement accounts like IRAs, to help young people start planning for their future.

Starting small with regular contributions, even to a basic investment or retirement account, can lead to long-term financial security. By learning the basics of investing, young adults can take control of their financial future and work toward their life goals.

Planning for Big Life Events

Major life events such as further education, purchase of a home or starting a family are usually associated with financial commitments. Here are the accounts and loans created by Farmers State Bank to help young people to manage their finances during these stages. These events can be planned with clear goals for savings, instructions on how to cut expenses and ways of financing large purchases given by our financial advisors.

Financial Considerations for Major Life Events:

Continuing education:

Consider other choices such as having a 529 plan or using your own money.

Home ownership:

Read about mortgage loans, down payment, and homebuyer programs.

Starting a family:

Budget for things like medical, child care and education costs.

If these events are planned for in advance, the cost can be significantly reduced and these milestones made more manageable.

Growing Financial Literacy

Financial education is another way at Farmers State Bank that we strive to help young adults be empowered. Starting from explaining such basic concepts as interest rates up to such sophisticated topics as saving and investing, financial literacy is vital for achieving long-term goals. On our website, you can find a Financial Literacy Hub with articles, widgets, and calculators to help you understand how personal finance works.

Young adults can also attend our workshops and/or online seminars where they can learn about various financial issues, starting with the most basic ones such as budgeting and ending with more complex ones such as investing. When young customers have financial literacy, they can start their financial life with confidence and understanding.

Bottom Line

Budgeting for young adults is not as complicated as it may seem. Providing young adults with the tools they need to make the right financial decisions for their future, Farmers State Bank offers the right balance of support, information and products. From budgeting, saving, credit building to investing, young adults should begin practicing them so as to have a healthy financial future. At Farmers State Bank, we’re dedicated to being a trusted partner on this journey, ensuring young customers have the tools and support they need every step of the way.