I wish I knew what I know now in my 20’s. In my last blog post, I mentioned the six money mistakes I made in my 20’s. Today, I discuss the five money moves to make in your 20’s. There isn’t a specific age to start working on your dreams. The earlier you start, the better your finances will be.
SAVE, SAVE, SAVE
One of the five money moves to make in your 20’s is to save as much money as you can. Most people stay at home with their family in their 20’s, and if you don’t, consider doing so to maximize your savings (assuming everything is alright at home). When you stay at home, not only are you not paying rent, but you are also saving on utilities and groceries. All of those things add up if you live alone. If you have to rent, find a less expensive unit to help you save a portion of your income.
BUDGET, BUDGET, BUDGET
At a young age, most people do not think about creating a budget. However, budgeting is one of the five money moves to make in your 20’s. When done appropriately, it allows you to see all your expenses and eliminate any unnecessary future spending. The simple way to budget is to list all your income and debt and figure out which is which. However, if you want to account for every dollar, you must budget every dollar you spend, such as gas, bus rides, Uber rides, and eating out with friends. If you put aside $20 a month to use for outings, it allows you to check yourself after you have exhausted the $20. However, without the budget, you may likely spend more than that due to multiple outings in a month. A budget tells your money what to do, rather than stopping you from spending it.
PAY DOWN DEBT
Some financial experts will tell you to get rid of all your debt. However, I believe in paying down your debt and taking care of your other finances. Many folks in their 20’s, sign up for their first credit card or finance a new car. If you can consistently pay the debt off, it can make a significant impact on your finances once you turn 30. The last thing you want to do is carry a high balance, not only will you pay more money to the bank due to interest, but also, extra expenses that you could avoid. I always advise folks to only use a credit card for items they can pay with cash.
INVEST, INVEST, INVEST
Investing is another one of the five money moves to make in your 20’s. I started investing in my late 20’s, and that remains one of my biggest financial regrets. You lose so much money when you start late, so I always try to talk to people to get on board now than later. A small amount of money invested at regular times over a long period provides a substantial gain. So, do not wait, start now.
CONTRIBUTE TOWARDS 401K
Many employers provide a 401k plan to their employees. Unfortunately, many don’t know what 401k is. 401k is a retirement plan by employers. Many companies usually match up to a specific percentage. Every dollar you contribute, your employer usually matches a dollar, so start early to take advantage.
When it comes to financial goals, it is important to start early because not only does it provide a safety net, it also helps you achieve your goals faster. You can retire at an earlier age when you start early compared to people who start in their 30’s. There is no set age to start your goals. The goal is to start now if you have not done so already.
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Till next time,
Charly
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