Your 20s is the ideal time to build yourself a stable financial future. While the pay isn’t usually that great in the early years of our careers, laying the groundwork for financial security should still be a priority. So, wherever you are and whatever you do now, just get started.
Here are financial milestones to inspire you.
The thing about emergencies is that they happen when you least expect them. Job loss, medical bills, and major car repairs are just some of them. In such cases, the not-so financially savvy of us are caught off guard.
Without so much of choice, they dip into their savings accounts or reluctantly turn to their parents for help. Worse, loans become their way out of the unpleasant financial situation. Two-thirds of Americans know better. They regularly stash cash for unforeseen events, saving like ants preparing for the rain.
No wonder why they’re more resilient to financial bumps and can maintain their lifestyle amidst unexpected expenses. If you haven’t started building your emergency fund yet, your 20s is the best time to get to work.
According to financial advisors, people should save at least three to six months’ worth of expenses to stay out of debt during anticipated financial blows. In case you’re the breadwinner of a single-income household, try to increase your fund to cover at least a years’ worth of expenses.
Buying life insurance here in Taylorsville is also recommended when you have people relying on you financially. An insurance policy helps protect and support your family by replacing a loss of income.
Pay Your Future Self
This one is also about setting money aside, but for your retirement. From where you are now, the twilight year seems far off. Why waste your best years worrying about something that’s way down the road and you can never make right?
Here’s why: planning for retirement in your 20s is easier because you have fewer financial responsibilities. Now, aside from student loans, you probably don’t have to think about paying off a mortgage and raising a family of your own.
Plus, with time on your side, saving for retirement can be an exciting prospect. Imagine being able to maintain your lifestyle without having to work every single day. When you’re older, a retirement plan can feel like a chore – a threat even.
Years slip by. Suddenly, you’re running out of time, and the thought of getting stuck with a life of never-ending work continually makes you anxious.
Set Mom and Dad Free
Most of us instinctively turn to our parents when the going gets tough, especially when it comes to money. After all, there’s nothing wrong with accepting a bit of assistance from mom and dad, right? Young adults, however, should make it their goal to get off their parent’s payroll little by little.
It starts by ditching mom’s credit card, getting a job, and paying for your own phone bills. Eventually, with planning and saving, you’ll be able to move out of their crib and into yours. If that’s not possible yet, try to contribute to the household budget.
When you finally manage to live on your own, start setting money aside to pay off your student loan and ultimately build an emergency fund. Yes, we’re going back to the first goal. You see, being self-sufficient is all about removing your parents out of the financial equation as much as possible, even during emergencies.
If you find yourself desperately in need of mom and dad’s help, it’s fine to reach out. However, make sure to set boundaries for yourself and them. You don’t want all your efforts to go to waste by relying entirely on your parents again.
None of these happens overnight. As with any other life goals, financial milestones are achieved through planning, hard work, and self-discipline. The good news, since you’re only in your 20s, you still got a lot of time.