No one thinks that getting your finances in order in your 20s is glamorous. But it’s a total game-changer for your future. This rundown breaks down seven must-have money moves, from the basic building blocks to investing, handling debt, and shaping up your money mindset.
Get Good at Budgeting
You can fight it all you want, but budgeting is the cornerstone of any healthy financial plan. The key to getting yourself to budget might be changing your mindset. It’s not about saying “no” to fun; it’s about knowing what you CAN say “yes” to without scrambling for cash later in the month.
Build an Emergency Fund
An emergency fund is exactly what it sounds like: money you set aside for the most unplanned moments in life. A good goal is having three to six months’ worth of living expenses, but anything is better than nothing. Set up automatic transfers today, even if it’s $20 a month. That’s $20 more to fix your car than you would have had otherwise.
Understand Good vs. Bad Debt
“Good” debt is there to help you build wealth or a career, like student loans (within reason) or a mortgage. “Bad” debt is credit cards or anything with soul-crushing interest rates. Both have their place, and you may need to rely on either at one point in your life. You don’t have to think of debt as evil, but you do need to keep it on a leash so it doesn’t ruin your life.
Start Investing
Time is a valuable asset, even when it comes to saving money. Starting your investment journey young all but guarantees you’ll see a decent return later in life. Just make sure you’re smart about it; meme stocks might sound fun, but rarely is it the kind of rollercoaster that leaves a smile on your face at the end of it.
Open a Retirement Fund
Even if you aren’t keen on investing in stocks or bonds, invest in yourself by saving for retirement. Contribute regularly and early into your 401(K). Small amounts are fine, but if you’re lucky enough to have an employer match? Maximize that so you aren’t leaving free money on the table.
Learn To Set Goals
Yes, learn. There’s more of a science to goal-setting than meets the eye. The SMART framework (Specific, Measurable, Achievable, Relevant, and Time-bound) is an excellent start.
For example, saying you’ll “save money” is honestly not a good goal at all; it’s way too vague for most people to gain traction. Instead, try “I will pay off my high-interest credit card by the end of next year by paying an extra $50 on the minimum payment every month.” See how much easier that is?
Master Your Mind for Smarter Spending
Most of our spending isn’t logical — it’s emotional. Why do you think marketing and ads appeal to this side of us so much? It’s because it works. But you don’t have to be a cog in the machine if you understand your triggers.
Acknowledging that you want to spend when you’re bored or stressed is a powerful thing, and something you’ll want to understand about yourself early so you can meet your financial goals faster.
Read More:
- 30 Ways To Get Free Stuff (That Aren’t Scams)
- 12 Best Coupon Apps To Help You Save Money
- 13 Ways To Earn Money From Paid Surveys [At Home, Online & More]
