5 Financial Tips for 20 Somethings

The 20s are a period of exploration and discovery. They also present an opportunity to establish healthy habits that will lay a foundation for life-long financial success. Start with these strategies:

Spend Wisely

Start by tracking income and expenses, to gain an understanding of what is coming in and going out. Then, when you’re ready, create a budget. Prioritize living within your means. Leave plenty of wiggle room for saving, investing, and the inevitable unexpected twists and turns of life. Differentiate between wants and needs and take your time when contemplating costly purchases. Look for opportunities to save through discounts, strategic timing, or finding creative, cost-effective alternatives.

Invest in Yourself

Dedicating time and energy to making your life better, now and into the future, is one of the most rewarding and valuable moves you can make as you’re entering adulthood. Pursue degrees, professional certifications, and new skills that will pave the way to a more fulfilling career, promotion, and increased earning potential. Another vital form of self-investment is the allocation of resources toward your health and wellness.

Invest in Retirement and Brokerage Accounts

When you’re just getting started professionally, retirement may seem too distant to consider but (take my word for it) time flies. Saving at an early age offers significant advantages when it comes to investment. If you’re contributing through an employer, be sure to take full advantage of opportunities for matching money.

Retirement isn’t the only thing you’ll want to save for. It’s a good idea to keep a portion of your investments in an account that provides greater flexibility and can be accessed at any time, without penalty.

Debt Management

To avoid having to take on debt, prepare for the unexpected and anticipating, then saving for, large lump-sum purchases. Whenever you do owe money, whether its a student loan or credit card, make paying off the balance a high priority. Create a realistic and achievable plan to make payments above and beyond any minimum requirements. Target high-interest debt first.

Hope for the Best, Prepare for the Worst

It’s important to have a safety net, to provide protection and peace of mind. Set aside enough to cover at least three to six months of living expenses. Because healthcare costs can be substantial, it’s crucial to have adequate coverage. Consider deductibles, and co-pays, and limits when comparing health insurance plans.

Start today!

Remember, a little bit of effort goes a long way. A slight shift in course, now, will have a tremendous impact decades down the road. The journey begins with the first step.

Are you ready to take it?

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