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Financial literacy is a skill that’s often honed and improved with time, not something that necessarily comes naturally to those just embarking on their careers.

In fact, research from the National Endowment for Financial Education and George Washington University found that only 24% of 23 to 35 year olds showed basic financial literacy and a mere 8% showed a high level of financial knowledge.

It seems millennials are overconfident and underprepared when it comes to managing their money.

What to invest? What to save? How much should be earmarked for retirement? These are all questions that can be slightly overwhelming.

“Millennials are known for having unrelenting belief in their own abilities. This generation is diverse and highly educated. However, their overconfidence puts them in an extremely fragile financial position, and sadly, they don’t realize it,” Ted Beck, president and CEO of NEFE, said as part of the study.

Financial experts say there’s a variety of steps those just starting their careers can take now to help establish a solid financial foundation.

Establish a Budget

Maturely and wisely managing your money begins with sitting down and establishing a budget.

“A budget will not only keep you organized, but it will force you to take a hard look at any unnecessary spending habits,” says Jordan Sowhangar, certified financial planner and wealth advisor for Pennsylvania based Univest Investments, Inc. You will also never know how much you can save, or allocate to things like student debt, until you understand your monthly cash flow.”

Start Building Up an Emergency Fund

For those with decades before retirement, establishing an emergency fund is arguably a more pressing need than contributing enormous sums to a 401(k).

Without money set aside for unexpected expenses, you’re far more likely to resort to high-interest forms of borrowing such as credit cards in order to cover emergencies or help make ends meet, says Sowhangar.

“A great way to build your emergency fund is through an automated savings plan,” Sowhangar explained. “After you’ve created your budget, you will know what you can automatically transfer to a savings account each time your paycheck comes in. A good rule of thumb is to aim for an accumulation of three to six months’ worth of your expenses.”

Start Saving for Retirement

For millennials, retirement may seem like a very very distant horizon, and therefore becomes a very low priority.

However, the earlier you start saving, the more time your money has to work for you through long-term, tax deferred growth.

Lori Atwood, a certified financial planner and founder of the personal finance platform Fearless Finance, suggests funneling 15% of your income into a 401(k). If your employer doesn’t offer one, create a Roth IRA and max it out.

Diversify Your Investments

When considering options for retirement savings, Chuck Mattiucci, AIF and senior vice president at Fort Pitt Capital Group in Pittsburgh, Pennsylvania suggests putting your money in a variety of investment vehicles.

“We see a lot of people save money in obvious accounts like a 401(k) or traditional IRA, but when you go to transition to retirement and pull that money out, you can create a tax issue,” explained Mattiucci. “Diversify between accounts – contribute to a 401(k), but also consider a Roth IRA if you’re eligible, which is taxed up front as opposed to down the line when you pull money out. Build those different buckets now to combat tax bombs later. This gives you the ability to have some control over a tax situation.”

What’s more says Mattiucci, don’t be scared to be aggressive with an investment portfolio and weight it heavily toward stocks. Not only have stocks historically outperformed other types of investments, but also those who are still young have time on their side, meaning there’s plenty of opportunity to weather any storms in the market.

“Younger investors want to be aggressive to get as much return as possible,” said Mattiucci.

Build and Protect Your Credit

Establishing a strong, positive credit profile is another important element of smart personal financial management. And a large part of this effort involves regularly monitoring your credit score.

It’s never too early to start checking your credit record and there are plenty of free resources to do this, says Gage Kemsley, vice president of Oxford Wealth Advisors in New Mexico.

“This will help to catch mistakes or fraud, but even more importantly, it will keep debt management at the forefront of your mind,” said Kemsley. “Follow the tips given by free credit monitoring resources to improve credit scores.”

Think Ahead

One last tip – don’t be shortsighted with your financial planning and strategies.

“It’s easy when you’re just starting a career to only focus on building an emergency fund or contributing to 401(k),” said Mattiucci. “But, think ahead and consider estate planning, creating a will, or looking into a life insurance policy. No matter how young you are, it’s always beneficial to sit down with an advisor and have a financial plan in place.”

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.

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