Your twenties are when you start experiencing all that lives in the real world. For many, this is when you graduate from college, start earning a steady income, get your own place and start doing things yourself.
Your twenties are also a time when you should set and work towards some very important financial goals to ensure your long-term financial stability.
1. Start saving for retirement.
Once you start earning a steady income, one of the first things you should do is start contributing to a retirement account. Either an IRA or through your owner’s 401 (k) program, let’s get started. Starting early with retirement savings gives your money the opportunity to grow and take advantage of the magic of compound interest rates.
2. Start an emergency fund.
The whole point of having an emergency fund is to help you get through uns planned situations. Having cash as a backup when “life happens” means you won’t have to rely on credit or debt piling up to deal with your emergency. Start with the goal of saving three months of basic living expenses and then increase the target to six months. No amount of money is too small to save!
3. To make definitive payments and minimize credit card debts.
You should start eliminating any credit card debt you’ve indebted to. Piling up debt will de-save your money. Build a repayment plan into your budget and pay it off as soon as you can.
4. Start paying off your student loans in full.
Student loan debt is a burden that many people bear. If you suffer from this type of debt, the sooner you overcome it, the faster you can get rid of it. A lot of people make the mistake of not prioritizing their student loan debt because of low-interest rates or loans that can be paid late – it’s important to realize that this is still the debt you’re responsible for. Delaying or only paying interest will increase the time and amount you will allocate. Create a plan to start paying your student loans and get them!
5. Start saving for other big goals.
If you intend to buy a house, pay for a wedding, or pursue a high-level degree, you need to hoard cash. Just like repayment, build a savings goal into your budget. Don’t be afraid to set and reset your goals – everything will happen! You will have to take many paths before choosing the right one, the most important step is the first: preparation.