1. Control your spending.
It’s easy to swipe your credit card and not think about the money that you spent to pay for your fashionable Gucci bag and smashing Jimmy Choo heels. Although it’s tempting to splurge using your “magic card”, just stop and re-evaluate your situation before you get tangled up in a web of debt. The most basic thing to do to help you manage your finances is to know how much you earn, where you spend it, and what’s left of your money. Being aware of these three important considerations will allow you to control your money so that you can save up for your future.
2. Keep a savings account.
Fight the urge to splurge! Set aside a portion of your monthly salary before you get accustomed to spending it every month. Find a reputable bank and open a savings account where you can put your extra cash. This way you can avoid the temptation of using the extra money that you have saved for things that you don’t need.
3. Get out of debt.
Many 20-somethings who are fresh out of college or going to graduate school need to settle their student loans. If you have a debt that needs to be settled, then do something about it as early as possible. Always remember, debt can slowly eat your hard earned cash, so make sure to pay off your debt until it’s completely gone, and avoid acquiring more in the future.
4. Setup an emergency fund.
Paying off your student loan and keeping a portion of your salary into a savings account are important things that you need to do. But having some cash that you can use during an emergency is essential as well. So when life throws you curve balls, it’s crucial that you should be financially ready. How can you do this? Set up an emergency fund that you can easily access. Aim to save three to six months worth of expenses, but the exact amount will depend on your income and expenses.
5. Invest in stocks.
Don’t be scared to invest your money in stocks. Once you have tucked away enough money for your emergency fund and you’ve paid off your debt, you can start thinking of investing your extra cash in the stock market. You can invest in stocks as early as now so you can achieve the highest returns over time.
Your 20s is the best time to plan for your future. It’s the perfect moment to start managing your finances and be on the road to financial independence. By following these simple tips and tricks, you’ll feel confident to easily manage your finances and secure your future.