There are many advantages to being in your 20s and early 30s. You can build a foundation to ensure your financial success for a lifetime. The decisions you make now have a tremendous amount of influence over your future. Make the effort to ensure that you’re making wise choices.
Determine your financial future today:
1. Create an emergency fund. It only takes one minor financial catastrophe to affect your finances for many years. A $1,000 car repair can cause more challenges than you think. You might have to max out your credit card, which negatively affects your credit score. The additional monthly payment can make you late for other payments.
• Save a few months of living expenses, and you’ll be able to handle nearly anything.
2. Begin saving for retirement. Time really is on your side. You don’t have to save much each month to retire in style if you get started early enough.
• Waiting 7 years will cut your eventual nest egg in half. Waiting 14 years will cut it by 75%. Get started right way.
3. Build a positive credit history. If you ever want to purchase a car, home, or receive any other type of conventional financing, your credit history is important. Your credit score can affect many things, including purchasing a cell phone plan or getting a job.
• Responsible use of a credit card or two is the easiest way to accomplish this. A small loan from your bank is another simple option.
4. Avoid debt. Dealing with debt is akin to climbing a mountain with rocks in your backpack. Avoid purchasing items you can’t afford. Few stresses match the feeling of being heavily in debt. Even very wealthy people have accumulated more debt than they could manage.
5. Consider a used car. A new car may seem like a mandatory purchase, but new cars are considerably more expensive than those just a few years old. Remember to avoid taking on too much debt.
6. Examine your online presence. Your employment can be affected by your online presence. Look at all of your social media accounts and determine if your employer would be impressed.
• There’s a reason why most working adults avoid Facebook. Give the impression that you’re an intelligent, mature adult.
7. Start a second income. One of the best ways to ensure that you always have an income is to have more than one income stream. It could be a second job or a small online business. Remember to save some of it!
8. Get insured. Protect yourself and your possessions. At the very least, have renter’s insurance to cover your possessions and health insurance to protect against catastrophic medical bills. Other types of insurance may also apply. It can worthwhile to contact an insurance professional.
9. Take advantage of your employer. Many employers offer many benefits. Ensure you’re getting all you can out of them. These can include life insurance, savings plans, 401(k) matching, and host of other benefits.
• Read your employee handbook and talk to your HR department.
10. Consider waiting to start a family until you’re financially stable. Getting married is easy, but staying married can be difficult. The failure to stay married can create many financial challenges, especially if you have kids. Even in secure marriages, children are expensive.
• When you’re 30, you won’t recognize your 22-year old self. There’s no hurry. Make a wise decision.
Right now, you’re in perhaps the most influential period of your financial life. Any mistakes can potentially affect your financial future for decades. Getting off to a good start is the best way to ensure a positive financial future. You also have tremendous financial freedom. Use that freedom to build a strong financial foundation.