For someone in his or her 20s just starting out, the world is your oyster. Right now, change has become somewhat of a way of life for you. It is time to choose a career, find a place of your own to live, pay your own bills and make your own decisions.
With so much change abound, it is important to have a stable foundation financially. It makes no difference where you are on the road to independence, it is possible to set yourself up for a lifetime of financial success.
Take the Time to Plan Ahead
In order to get everything that you want out of life, it is important to set goals and create a plan to achieve those goals. You would not venture out on a major road trip without a map; likewise, you need a map for your financial future.
First, ask yourself exactly what you want your future to be like. Begin by considering the short term, say the next five years or less. Then, think about where you want to be in the next ten years, and then the next twenty years and beyond.
Creating a budget is one of the best ways to work toward the goals that you set. With a budget, you will be able to determine exactly where you money is going and then make any necessary changes to keep you on the right track.
Living Within Your Means
If you see something you like, yet cannot afford it, do not buy it. So many people find it difficult to follow this simple guideline and end up swimming in debt. In addition, do not borrow money unless you absolutely have to in order to purchase something of lasting value, such as an education or a home.
Make Saving Money a Habit
There is no doubt that you work hard for your money. Therefore, when you get your paycheck, the first payment you make should be to yourself. Open a savings account with a good interest rate and make a habit of putting a minimum of ten of your paycheck into that account. Ten percent is such a small portion that you will hardly realize it is gone. This is one instance where out of sight out of mind works to your benefit.
When you have a savings account, it can work as an emergency fund, should you ever lose your job or run into an unexpected expense. Keep enough money in your saving account to pay your bills for three months. Then, you can divide your savings from each paycheck between your emergency fund and a retirement fund or something fun like a vacation, home, new car, etc.
If you learn to save money out of every paycheck, live within your means and stick to your budget now while you are still young, you will be able to save thousands of dollars throughout the years of your life, which in turn will lead to a less stressful life.