If you are just starting down your career path, this next story is meant just for you - practical words of advice when it comes to you and your money. It can't be repeated too often.
Credit cards are not in themselves good or bad, but Susan Utsugi of Central Pacific Bank says, "Credit cards are not a form of income because you do have to pay it back and if you don't pay it all back at the end of the month, then you're charged interest on it. And that interest can build up over a period of time to an amount that would probably surprise you if you looked at how much interest payment you have made over a period of time."
The simple fact is many young people can't afford to add credit card debt to their load.
"Some young adults have student loans or other debt and I think you want to make sure that you are paying off your higher interest rate credit first,” she said.
There may even be some young adults who, one way or another, find themselves buying a home or condo.
Good idea, Utsugi says, and a better idea is to try to pay a little more on the principal
each month.
"Or maybe one payment in principle per year extra toward that balance, it would make a significant difference in the amount of interest you will save over the course of the mortgage,” she said.
Finally - and this may be the farthest thing from your mind when you're in your twenties - Utsugi recommends a long term plan for your finances.
"Yes, I would highly recommend that they start saving for retirement as soon as they start working. It seems like a long way off and something we have a lot of time for...but I know as well how time goes by,” she said.
If you are self-employed, consider an IRA.
Utsugi says to ask your employer about a 401k plan and try to put the maximum in that.
