When you enter the working world, you tend to be on a tight budget, which makes prioritizing your financial future difficult. However, this isn’t the time to sleep on taking control of your money. The foundation you lay when you’re young can help set you up for financial independence.

“Independence is freedom—bottom line,” Regina C. Garrido, J.D., CPA, vice president and senior wealth strategist at PNC, explained. “When you have to rely on someone, you’re unable to do what you want or have the voice you would if you were financially independent.”

What financial independence looks like can vary at different stages in your life. For young women entering the workforce, this may look like not relying on their parents to pay their bills. For those who are more established in their personal and professional lives, it can mean being able to merge select assets with a partner while also having separate savings in case their situation changes.

Here are some ways for women in the early stages of their careers to begin their journey to financial freedom.

Start to Establish Credit Early in Your Career

According to Anna Vitelli, executive vice president of PNC Private Bank Hawthorn®, “As you enter your career, you want to establish good behaviors right out of the gate. Building credit is a great place to start. The sooner you can establish your credit score, the better.”

Building credit when you’re younger makes it possible to borrow money in the future, adds Garrido. When you buy a car or a home, your credit score plays a big role in whether you’re eligible to borrow money and what interest rates you’re offered.

“When you think about big purchases, most don’t have the liquid means to make that possible,” Garrido explained, “So you're going to need to borrow and the only way to do that is to have a lender who is willing to take you on as a borrower. Your credit score is a major factor in a lender’s decision to extend credit to you.” For better or worse, your credit score now can significantly impact your financial options down the road.

Strike the Right Debt Balance

Many young adults have debt, whether from an auto loan, credit card, or student loan. Those monthly payments—and their high-interest rates—can take a financial toll on someone just starting out.

While it’s important to make progress on paying down your loans and credit card balances, borrowing money is the key to building credit. Point being—you shouldn’t fear all debt. Some debt is actually good.

Garrido shared that good debt can help you invest in your future (like a student loan or business loan). It can also allow you to invest in an appreciating asset, like a home. “If you're able to take on a mortgage and own a home, you can build equity,” Garrido said. “It's your asset, not somebody else's. So a mortgage is a type of good debt to take on.”

In 2015, Kaitlin Hudock graduated from Duquesne University with a B.S. in Business Administration, Finance and Marketing and started working in the financial services industry. Post-college, she focused on building financial independence by establishing good credit card habits. ““I was very careful to pay off the balance each month so that I didn’t have to also pay interest that accrues at a high rate which could lower my credit score,” shared Hudock, who now works in PNC’s Corporate Responsibility Group. “I bought a house about two years ago and my healthy credit score was impactful when I went to secure financing.”

Merge Finances Strategically

When young professionals decide to marry or when they are in a long-term partnership, they may choose to merge finances.

“It’s important for couples to be transparent with one another and do what works for them,” Hudock explained. Hudock and her husband implemented these simple tactics to manage their newly combined finances after their recent marriage:

  • Lay it all out on the table by communicating what assets and debt you have
  • Set a joint budget and understand what your income and expenses look like as a household
  •  Start small by opening a joint account for living expenses
  •  Set goals as a couple on how to manage money and make a plan to stick to them

Learn to Budget for Your Future

One way to make paying off debt and managing your financial life easier is to learn how to budget. Creating a budget that takes your financial goals into account is extremely important. In addition to including everyday expenses (rent, groceries, insurance, etc.), your budget can consist of financial goals such as:

Retirement contributions. The goal is to contribute enough money to your 401(k) to maximize your employer’s contribution match if your employer offers it.

“Everybody should put in at least what the employer matches because that's additional compensation,” Garrido stated, “If you're not putting that money in, then you're losing out on what is, essentially, free money.” If you don’t have access to an employer-sponsored 401(k), you can instead focus on contributing to a Roth or traditional IRA to help reach your retirement goals. Generally, putting 10% to 15% of your salary into retirement savings is a good rule of thumb.

Emergency fund.Young professionals should aim to have three to six months worth of expenses saved.

“When I started working after college, I saved a percentage of each paycheck by having funds automatically deducted from my checking account,” Hudock shared. The emergency fund came in handy a few years ago when her vehicle stopped working. “These types of things are never planned,” Hudock said, “Luckily, I had been diligent with my savings and had money set aside to be able to buy a new car.”

Extra debt payments. If you have room in your budget, contribute more than the minimum payment on your loans. That way, you can pay off your debt quicker and save on interest.

Savings goals. Including savings in your budget can make it easier to accumulate funds for a down payment on a home, a wedding, or another major expense.

Investments. After maxing out your retirement matching contributions, Vitelli suggests turning your attention to creating an investment portfolio so that there is a pool of money you'll be able to use for both short-term and long-term needs.

It can be challenging to balance these financial goals and know which to prioritize. Hudock focused her efforts on paying the minimum required payments on all sources of debt and building a solid emergency fund, which ultimately helped her avoid taking on more debt.

Learning how to take control of your money takes time, but committing to establishing a strong financial foundation can lead to a more secure and independent financial future.

If you are beginning your journey towards financial independence, visit pnc.com/women to request a meeting with a PNC-Certified Women’s Business Advocate.