As you consider the impact of the pandemic over the past couple of years, what comes to mind? First and foremost, health, of course, but after that comes money – or maintaining a reliable sense of security that can support us during a time of need. Now more than ever, it’s important that young professionals, recent grads, millennials, and especially Gen Zers understand money and build a personalized approach to creating a stable financial future. 

Without getting too complex, there are some critical components to keep in mind that can make a difference in your financial state and overall peace of mind, no matter what the world throws our way in the near future or later years to come.   

Set up an emergency fund. Having a financial backbone can be helpful during these uncertain times but is also a recommended practice for every season of life. As a young adult or new professional, it might seem less necessary, but the sooner you do it, the more funds you can build up! Not to err on the side of negativity, but rather precaution – accidents happen, and life can be unpredictable. Building an emergency fund that can help cover a last-minute procedure or allow you to take some time off work if you get sick might be the best thing you’ve ever done. There’s less stress and nothing lost if you simply have a plan to approach trying times. 

Understand what you can afford. A huge part of managing finances is knowing how much you can afford after you’ve taken out money for bills, maintenance, an emergency fund, and weekly expenses. You might be saving up to buy your first home at this time in your life. If you’re genuinely wondering, “how much house can I afford?”, you’re certainly in the same boat as many young professionals approaching this milestone. It’s easy to get wrapped up in the excitement of a major life change but calculating your debt-to-income ratio can help you make a purchase you are comfortable with and avoid future financial issues caused by overspending. 

Think about the long game. The future is just as important as the present when it comes to financial gain and stability. By doing some research and meeting with a professional, you can avoid retirement planning mistakes that many young adults make when they neglect to start investing early or don’t utilize the right types of accounts. Oftentimes your organization or company will offer a 401k match or similar investing opportunity, which you should take full advantage of. Additionally, you can open a Roth IRA which can allow you to invest more of your income for large future gains. Depending on if you have student loan debt, there are ways to balance paying back loans and investing in your future, all while affording your current lifestyle. 

Incrementally adjust your budget. Of course, maintaining an overall sense of how much you spend is half the battle when it comes to financial management. What many young adults and professionals forget is the fact that a budget is meant to be adjusted along with your investment contributions. Especially early on in your career, you’re more likely to experience large changes in salary should you get promoted or switch jobs, which is why adjustments should be made to match your current income and lifestyle. A budget should not be extremely limiting, rather it should allow you to freely spend within your means while ensuring you’re staying on track for the future. 

Don’t sleep on insurance. There are many factors to determine when and what type of insurance you need. Some are a must-have at certain times, others you can decide when it’s time to buy insurance based on your age and your situation. For example, if you’re buying a home, homeowners’ insurance will be non-negotiable, while life insurance or certain health-related insurance won’t be required, rather highly encouraged. Plans also vary when it comes to coverage and affordability, so take some time to ask an insurance representative about their recommendation, and don’t be afraid to do your own research, too. Although an added cost, insurance will protect you from large bills, stress, and can keep you out of debt in a crisis. 

As a young professional, you’ve already done a lot of hard work to support yourself. Now it’s time to make the most of your hard earnings by investing in your future while protecting yourself from uncertainties thrown your way.