Amid inflation and housing challenges, students and young adults can navigate the path to independence by prioritizing their financial health. Here are two common (yet easily avoidable) missteps that young people should be mindful of.
Mistake #1: Waiting too long to start investing
Many young people say they don’t earn enough money to start investing, and as a result the end up waiting until they are in their 30s and 40s. If you have an income, you should be able to justify putting a small amount of every paycheck into investing. With compound interest these small inputs can go a long way when time is on your side.
Mistake #2: Only focusing on paying off debt
It can be tempting to put off investing while you have other debts on your mind. Depending on the interest rate of your debt vs. the expected rate of return of your investment, there is a right answer to this question that can be calculated. However, regardless of the math you should still consider putting some money into investing along with paying off your debts (if for no other reason than building the habit).
There is massive value in just getting started! When your debt is paid off or your income level increases, and you know want to invest more actively – you can easily increase your investing amount since you are already setup.
How to get started?
At Kawartha Credit Union, we offer new and existing members a great deal of options, depending on your preference and time commitment.
A wise first step is to talk to financial advisor. In one appointment you can set basic goals, choose investment products and set up a regular payment schedule (or as we like to call it an “Automatic Savings Plan”).
There’s also the increasingly more common option of direct investing. Direct investing has become a popular choice for both seasoned investors and those starting out. If you are someone that wants to spend time learning about how to DIY invest, you can get started without even leaving the comfort of your home. At Kawartha Credit Union we work with Qtrade to offer fantastic direct investing solutions to our members.