There is no time like the present to start thinking about your financial future. If you are in your 20s, now is the perfect time to start planning and setting your financial goals. The earlier you begin financial planning, the more likely you are to meet and exceed your financial goals. TIME is on your side!
Here are some important things you should keep in mind when considering your financial options.
Do Not Worry About Status
Many young adults get so caught up in buying all of the latest gadgets and the best car just to show off to their friends. This often leads to wasted money that could have been invested into securing a financially stable future. When you are in your 20s, do not worry about status items. If you properly invest at this age, you will certainly be able to afford whatever you want later in life. A keeping up with the Joneses mentality is foolish as the Joneses are broke J
Make the Right Investments
When you are young, you may have the ability to make some riskier investments. This does not mean that you should not do your research and be very careful about what you invest your money in. Take the time to set your future long-term and short-term goals and only make investments that match these goals. Remember that riskier does not me foolish if properly researched.
At this stage in your life, creating a growth based portfolio may be more advantages.
Keep Your Credit Clean
One of the most important things you can do when you are younger is to keep your credit clean and in good standing. Do not incur any debt that you cannot afford to pay off, always make your monthly payments on time, and set up a savings account for emergencies. This will allow you to get a better interest rate when you need to take out a loan for larger items like a car or a home.
Do not make the mistake of thinking that you know everything. Get some advice from those who have spent years understanding investments and how to plan for their future. Meet with a financial advisor and get some advice on how to manage of your finances. Also, do not be afraid to ask your parents for advice. They certainly have your best interests in mind and you can learn a lot from them and how they planned for their future. Align yourself or listen to those who actually have money, not those who talk and have nothing (this will be the majority of people).
Learn from Your Mistakes
Mistakes are inevitable and they are going to be made from time to time. The important thing is that you learn from your mistakes, and that you use this knowledge when making future financial decisions. Mistakes made in your 20s are not likely to have a major impact on your future finances, but the lesson learned from the mistakes can help you for the rest of your life.
Mistakes can also be minimised if as mentioned in the Get Advice section, you listen to people who are actually successful in investing and have money.
Find a Job You Enjoy
You will soon learn that money is not everything, so do not select a job just because it pays better. Instead, find a job that you enjoy doing, yet still pays an adequate salary. With proper financial planning, you will still be able to set enough money aside for your future.
You don’t have to have a large income to make a killing from investing, check out the example on compound interest and savings here.
Start Contributing to Your Super Account
Some people in their 20s think that they are too young to start contributing to their super account. Nothing could be further from the truth. The more you can save now the more financial security you will have in your future and the early you can retire from your job. Compound interest over the years plus a favourable tax break makes Super a no brainer!
These tips will start you on the path to financial security. The important thing is to be smart about how you spend, save and invest your money. Financial decisions you make now can offer you financial stability in the future and by the time you are ready to purchase a home and start a family, you will be financially prepare.
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