Learning to handle your money in your 20’s is not always as simple. You might be excited about your first real job, living on your own, while finding out ways to maintain your social life.
Since is important to develop good financial skills, the earlier we start the better. Here’s 5 things you should do with your money before you reach 30.
1.Have an emergency fund
Having an emergency fund is one the smartest things you can start in your 20’s. Emergencies happen and the best way to be prepared for the unexpected is to have savings. Dave Ramsey says to have at least $1,000 emergency fund.
Money you can quickly access if your car breaks down, or you have a unexpected medical bill. This fund will keep you from using credit cards, which can cost you double in the long run.
2.Set up a retirement account
The earlier you start saving for retirement the better, specially if your company has a 401k match. Thats basically free money that you will have for retirement.
3.Check your bank statement often
Using plastic (debit card, credit cards) has been shown to not affect us the same way as using cash. When we use cash to make a purchase, we see, and feel the money and are less impulsive when making random purchases.
Check your bank transactions often and learn where all your money is going. A friend of mine once noticed, she was paying a monthly food delivery subscription she only used once and forgot to cancel it.
Over time the monthly subscription added up to a total of $200, she never even noticed until months later.
4.Pay off debt
The more I listen to Dave Ramsey, the more i am motivated to pursue a debt free life. Paying off debt, from collage loans, to car and credit cards, can help you keep more money in the long run.
Money you can use for retirement. Make it a priority in your 20’s to work on paying your debt, and learning to pay in cash.
5.Learn to budget
Learning to budget is the next important thing to do. Understanding where your money is going and giving every dollar a name can make you feel more in control in your 20’s.
Budgeting builds your willpower in the long run, allowing you to stop impulse buying and really have enough money to save for that cool vacation. Best budget app — www.everydollar.com
6. Invest in yourself
Find a way to increase your income overtime or learn other skillsets that can help you change careers if you want to. This can be with a side hustle, side-business or a part time job you enjoy. start a blog or website where you can write, get creative or improve your digital marketing skills.
Alway find ways to increase your earnings or your skillsets so you don’t become stagnant over time. It can also be a simple way to express yourself and give you control of your life. Start a blog, online business or get a website using Bluehost for less than $4 a month.
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