“If you’re so stressed because you can’t pay basic rent, you’re not going to make long-term decisions, you’re going to make short-term decisions,” she says.
2. Care about your credit score
The earlier you start caring for your credit score, the better.
“It’s the only grade that matters when you leave the financial system. It represents your financial responsibility,” von Tobel says.
Some of the best ways to build healthy credit are to say no to credit card debt and keep your score clean and above 750. A good credit score typically is above 700, and those higher than 760 are considered excellent, according to Capital One.
Also top of mind is contributing to your retirement fund as early as age 20 because, as von Tobel says, “compounding interest is not magic, it’s math. The earlier you start the more it grows.”
If you haven’t looked into your credit score, von Tobel recommends starting with sites like CreditKarma.com and CreditReport.com to get the basics.
3. Follow the 50/20/30 rule
If you’re looking to better manage the way to spend your paycheck, this is the formula that von Tobel sticks to. A similar rule is endorsed by self-made millionaire and founder of The Penny Hoarder Kyle Taylor.
The basics of the rule are the following: 50 percent goes to living necessities like transportation, rent, and groceries; 20 percent goes towards the future, like saving for retirement; and 30 percent pays for your lifestyle, like entertainment.
When thinking about saving overall, von Tobel suggests thinking about both parts of the balance: what goes in and what goes out. It’s critical to pay attention to your intake, by negotiating your salary, for instance, and to have a good financial plan overall.