Change is the only constant way of life – Avert the pangs of money mistakes during your 20s
by Guest Author Martha Jackson
When you’re in your 20s, you’re probably graduating from high school, settling down with your career and standing on the threshold of making some major life decisions. While you’re busy thinking who to date, where to reside and which career option to choose, don’t put your financial life on the back burner. Change is the only constant thing in our life and amidst choosing a career, paying your own bills, getting a furnished apartment, making some financial decisions is also a prerequisite of your new life. The more things change in your life, the more essential a stable fiscal foundation becomes. If you’re a twentysomething, there are some financial decisions that you need to make toavert the pangs of debt. No matter where you are on the road of independence, following the time-tested guidelines will enhance the odds of attaining financial success.
1. Saving should be made a habit: Don’t you work hard for earning those dollars? So, when your paycheck arrives, why not be satisfied with paying yourself first? Visit your bank and arrange an autopilot system of deducting money from your checking account and depositing it into the savings account. This way, you won’t require remembering the date on which you would transfer money and you wouldn’t even get the chance of missing the money when it’s gone before you’ve seen it! The initial savings priority when you’re in your 20s should be an emergency fund and once your emergency fund is well-funded, you can divide them according to your goals.
2. Plan ahead of time: To reach where you wish to go in life, you require goals and a plan that’ll help you chase your goal. Having neither a plan nor a goal is like driving a car with your eyes closed! What do you want in the near future? Plan for the short term, medium term and also for the long term. Yes, now you’re driving with wide open eyes! Budgeting is more like a steering wheel of your car as it helps you reach your financial goals. You can see where your pennies are going and also make the required adjustments to obtain your goal within the set period of time.
3. Trigger off your credit card debt: Did you already incur credit card debt? If answered yes, this is the best time to eradicate yourself of the albatross. Set a fixed goal to repay your entire credit card debt before you reach 30s so that you would have enough time to attend all the other financial responsibilities. If you make the minimum payments towards your credit cards, a $2000 balance with 18% interest rate would take nearly 10 years to repay and this would cost you an extra $1120 in interest rates. Use debt calculators to find out the amount that you will take to repay your balance.
4. Live a life within your means: If you can’t buy anything, don’t take resort to your credit card as using your cards to buy something that you can’t afford with cash is not a habit that you should incorporate in your 20s. Too many young adults have a heck of a time understanding this and they soon drown up to their eyeballs in credit card debt. Borrow money sparsely and only for all those things that have a long-term value. Keep a check on your spending while you’re young as this way you can save thousands of dollars.
5. Chop off the pecuniary umbilical cord: While you’re planning to stay in your own apartment and you’re planning your expenses from your paycheck, why would your mom and dad still manage your investments, balance your checkbook and handle your taxes? Remember that whoever has a control on your finances will always control your life. Parents share a common desire of helping their kids learn something new but you shouldn’t let it come in the way of learning the secret of succeeding financially on your own.
Does personal finance seem to be too boring? Well, even if it is, you should still try to master this art in order to secure your future financial life. Imbibe the above mentioned financial habits so that you don’t need to regret about your messed-up fiscal life.
Author’s Bio: Martha Jackson loves to write financial articles and she is a contributory writer associated with the Debt Consolidation Care Community and has written several articles on debt consolidation, debt settlement and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.
The best way to be financially strong is stop using and relying on credit card. You wont spend money on things that are less required if you are not a credit card user. Slowly and gradually, you will be in less debt and you will save money after few months time.