Let’s be honest, 20-year-olds aren’t exactly known for their strong financial management skills. But honestly, it’s not necessarily their fault or a bad thing — really! A lack of financial experience, combined with student loan debt, entry-level jobs, and the desire to travel can make it difficult to properly manage your money.
But no matter where your path in life is taking you, it’s so important to start learning the basics or managing money at an early age. With a little help from us, you’ll be in control of your finances in no time!
Track your spending.
Before you can make any changes or improvements, you need to know what you’re spending money on right now. For one week, write down every dollar that you spend in a small notebook.
Analyze your spending.
Now it’s time to take a look at what you’re spending money on. Is your money going towards necessities, like rent and food? Or are you spending it on non-necessities, like streaming services and eating out?
Make a change.
Now comes the hard part. Though it may not seem like it, the steps you take towards financial stability in your twenties will have a huge impact on the rest of your life.
- Start saving for retirement. Even if you can only deposit a few dollars a month into a retirement fund, it’s worth it!
- Start building credit. Having a credit card is a big responsibility, but it’s also very important. The more credit you build, the easier it will be for you to get a loan when it comes time to buy a car, a house, or rent an apartment.
- Create an emergency fund. Separate from your savings and retirement should be an emergency fund. If you, unfortunately, lose your job or fall ill, an emergency fund will lessen the financial burden. Most economists suggest having an emergency fund that you could live off of for six months.
- Be a safe investor. Especially if you aren’t well-versed in the stock market, you shouldn’t risk lots of money on risky investments. Instead, it’s better to invest in low-return, but safe investments.
But in the end, don’t let money control you.
While it’s important to save and be financially responsible, having a lot of money isn’t the most important thing in the world. Your twenties is also the time to find a job you love, even if the salary isn’t great. It’s also the time to travel and splurge here-and-there.
Looking for advice like this, as well as much, much more? Debra Solomon is a professional life coach for adults on the autism spectrum. To inquire about details, including fees and scheduling, please contact Debra Solomon at [email protected] or at 516-510-7637. Or complete a brief form so we may contact you.