13 Jul Financial Tips for when you are in your 20’s
It’s never too soon to start planning for the future, especially when it comes to building up your finances. For many individuals in their 20s, this is the time when they begin their first career and start settling into adulthood. It’s also a perfect time to take some small steps toward financial stability and success. We have compiled a few tips that we think could help any 20-something individual develop some money-saving habits.
College can be one of the best experiences you will have; it’s an opportunity to learn and grow, but it can also come at a hefty price. With tuition prices and living expenses constantly on the rise, it’s not uncommon for someone to graduate college with a tremendous amount of student loans. One of the best things that individuals in their 20s can do is pay off any debt they are carrying as soon as possible. From student loans to car loans, set aside as much extra income as you can to go toward paying off these debts. Paying loans off early allows you to dodge some interest, possibly saving you thousands in the long run.
Hand in hand with paying off your debts, it’s crucial to start building your credit. Making loan payments on time and even having a few credit cards in your wallet can help build up your credit history. The importance of this may not come for a few years until you start looking at investing into bigger purchases like buying a home, where you’ll need a good credit history for lenders to review. Just remember not to get overzealous with credit cards. Make sure to pick the right lines of credit for you, limit to only a few, and pay off your balance each month.
Your 20s are also a perfect time to start investing your money and making it work for you. Even if you aren’t at your dream job, look into what type of retirement plans they offer their employees. Something like a 401k can be rolled into a new account, even if you change jobs. Make time to meet with a financial advisor who can help you build up an investment portfolio. The stock market can be overwhelming for anyone without experience, and seeking some professional direction is a safe way to get your portfolio started. Making a return on your money is better than just letting it sit in a normal checking account.
The final tip to consider when planning your financial future is to live within your means. This doesn’t mean that you can never indulge, just don’t make it a habit. Building good financial habits is easier to do in your earlier years, and can make a drastic difference in what you will have built up for retirement.