3 Smart Financial Moves For Your 20’s
A lot of people wait until their older years to start focusing on smart financial moves and strategies, allowing themselves to enjoy the freedom of their 20’s. While this can be a nice luxury, its also important to understand that in terms of your financial future, the early bird always gets the worm.
The earlier you can start focusing on tactics to set yourself up for a more comfortable future, the earlier your comfortable future will arrive.
Here are some of the best things that you can do for yourself to set yourself up for a prosperous future.
Buy Your Necessities
It’s important to buy things that will help you move towards your future. If you want to get a job downtown but you live outside of the city, for example, you’re going to need to buy a car.
This can be a great learning opportunity for you if you decide to get financed for your vehicle. You’ll start learning the ins and outs of loans, and the importance of paying your debts.
Make sure that you have a healthy perception of what exactly “necessities” are vs “desires.” It’s important before purchasing something to ask yourself how this will benefit your future and is it something that could wait. Once you reflect on these factors, you’ll know whether it’s a smart financial move or not.
Build Your Credit
Use your twenties to start building a strong credit score for yourself. Once you have an excellent credit score you will be able to qualify for loans to purchase property, better cars, and qualify for credit cards that have much better interest rates and member benefits.
Building your credit means following your credit score carefully and paying all of your debts on time. Make sure that you pay your balance in full and don’t overspend. This way you will avoid getting into debt instead of building a high credit score. Getting into debt in your 20’s is definitely not the goal here. Instead, focus on small amounts of debt that you pay off quickly in order to show creditors that you are a responsible credit card holder.
Start a Retirement Account
The average American doesn’t start thinking about putting money away for retirement until into their 30’s and 40’s. By getting started on this 10 to 20 years earlier than the majority, you’re opening up a lot of opportunities for interest to grow.
There are a variety of options to choose from when it comes to putting money away for your retirement. You could go with an IRA, a 401-k, or perhaps you’d rather go with a traditional savings account.
By putting money aside and letting it sit there for 40-50 years, you’d be astounded at how much money you will end up with.