Laying the right foundation as you start your career is the key to future financial success, and at this lifestage, time is your greatest asset.  Consider that each dollar you save in your 20s can be worth ten times as much as one saved in your 40s.  Through the magical power of compounding, the beginning of your working life is the prime time to start saving towards retirement—even though many people don’t want to think about, or worse yet, act on this principle.

During this time, young adults are tasked with learning how to manage the spending and saving of their money within the constraints of their income.  Here are some steps to take now to put your financial future on track:

1. Identify your short, medium and long-term goals and budget accordingly. 

Your short term goals of less than five years might include a wedding, honeymoon, furniture or a new car. Medium term goals could include the purchase of a home and financing your future children’s college education, followed by long-term retirement goals. These goals will help you determine how to spend and save your money.

2. Establish an emergency fund.

A good guide is to save three to six months worth of living expenses to cover rent or house payments, utilities, car payments, food, transportation and insurance into a separate bank account that could be easily accessed in the case of job loss or uncovered medical expenses.  Don’t use the money for anything else.

HomeTown Bank recommends an automatic savings tool so you can achieve your savings goals without having to think about it.

Goal Setter Savings – An automatic savings account that helps you save by drafting from your HomeTown Bank checking account.

3. Build assets through saving at least 10 percent of your income. 

It may be wise to invest in CDs or money market funds for your short term goals and the stock market for your longer term goals.  Historically, the stock market has outperformed other types of investments over comparable time periods, but it’s not for the faint of heart.  You should consider a 401K plan if available from your employer or open up an IRA account.

HomeTown Bank can help compound your savings with an account that’s right for you:

HomeTown CDs – Maximize your return by locking in a competitive rate for a chosen term.

Personal Money Market – Earn higher interest rates while having the ability to access your money at any time.

HomeTown IRA –  IRAs are a smart tax-advantaged savings option to help you build your retirement.

4. Open a checking account for the way you live.

Conserve time, money and paper with HomeTown Bank’s convenient checking accounts with online banking and bill pay as well as free debit cards and no-charge ATM services.

Totally Free Checking – This no-fee checking account makes makes managing your cash flow simple. You can also earn interest on your balance.

Advantage Interest Checking – This account has preferred rates that reward you for using HomeTown electronic banking.

5. Borrow wisely.

Avoid high-interest credit cards and pay off your credit card debit monthly. Work with HomeTown Bank for your major lending needs including personal and vehicle loans, home mortgages and home equity lines of credit.  

6. Determine if you are ready for homeownership.

Owning a home comes with many advantages – a home can provide a lot of pride of ownership and a place to create family memories, plus it’s also a way to build equity in a place of your own. However, it’s not for everyone. Before buying a home, you should have little debt and three to six months of expenses saved in addition to your down payment.  Check out the rent vs. buy calculator here.

It is recommended to keep house payments at or below 25% of your monthly salary. Here's a calculator to help calculate your monthly payment.

There are many loan options to meet a variety of situations and needs. If you can afford a 15- or 20-year fixed-rate mortgage, you will quickly build equity in your home. With today’s competitive mortgage rates, experienced lending professionals and local decision-making, talk to a HomeTown Mortgage lender to find a loan that meets your needs.

7. Understand your credit report.

Your financial behavior over the past seven years, including how much credit you have, how long you've had it and whether you pay your bills on time is information included in your credit report. Three credit reporting agencies — Equifax, TransUnion and Experian — maintain these reports, and lenders buy them to help them decide whether to offer you a prequalification.  Your credit report also carries your credit score ranked between 300 and 850 that many lenders use to decide whether you are creditworthy and will repay a loan as well as the interest rate you pay. Your credit score is available from the three credit reporting agencies: 

Equifax –
TransUnion –
Experian –