Monday, September 12, 2011
Top Financial Moves To Focus On In Your 20's
You only live once, and your only young once... I know!
You don't have to give anything up... you can still live your younger years having fun, and possibly not working your life away... since we have the rest of our lives to work, right?
Do not forget that one day, you will be saying, I should have started saving when I was younger... so why not just start now? Just do it... take your risks when your young, risk not going to a party, saving $20 and throw it into your Roth IRA. (What's this... go to your local bank and they will be more than happy to tell you all about it... seriously, they will be extremely happy that your making the best decision of your life!) You'll get bored if I explain it here. But before you go, grab a job and start making some money, you'll need a job if you want to open a Roth IRA.
Do you think it's too risky to get a job during school? Do you not really need a job... well even if you don't need the money, grab a job, not only will you be helping out your future, but you may even see your grades rise! Studies show that often, students with part-time jobs perform better in school than those who don't... this is becasue of the communication skills you gain. (Of course this is not always true, for me it is though).
Follow These Three Steps:
(Remember, I'm doing this extra work, on top of school work, for a reason! Trust me. )
To get where you need to be in life, it's best if you have goals. With your goals, comes a plan. If you intend to meet your goals without a plan, you can compare it to driving a car without a steering wheel.
What do you want in your future? (Write it down, and read it over 5 times)
Try short term first (3-5 years)... medium (5-15 years) and then long (20 plus years)
Dont be afraid to budget.
2) Live within your budget
If you find yourself saying, I really cannot afford it, but I only live once... just let it go. Of course this depends on the situation and whether we are talking about an Ipod or a college Text Book. Go for the Text Book.
If you live within your means (and enforce it), you will find that over the next several years, that you have saved up/saved thousands of dollars.
You've got enough stress within your life, and not to mention school. Do the hard work now, save, and when you are older, you can live your life without an added financial stress.
3) Make your budgeting and saving a permanent habit... that doesn't mean you have to be 'cheap'
Always have at least $500 in your bank... nope, no arguing (except for certain situations), it's mandatory, and certainly not impossible (for the most part).
Try and eventually have at least three months of 'emergency' cash in your bank.
Once you've got the emergency funds situation dealt with, you can start dividing you monthly savings to go towards some other goals (vacations, first home, new car). The amount of savings depends on your salary. I would say three quarters of your salary going to savings would be fantastic... though this is almost impossible at points... when your in your lower 20's, this should not be a major problem.
In the next blog post, I will discuss Investing and paying down debt. But for now, focus on these three major issues.