Published On: Tue, Jan 23rd, 2018

The 3 Keys to Managing Your Money in Your 20s

The 3 Keys to Managing Your Money in Your 20s

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Your 20s can be a tough time. You’ve left college, you’re starting to get serious about your career, and some of you might even have, or be thinking about starting your own family, while others will be looking to travel more and have more fun! No matter what you’re up to in your 20s, there is one thing that you should definitely do – learn how to manage your money.

If you can build good financial habits in your 20s, they will see you through your life, so that you don’t have to struggle quite as much as your peers who think very little about money management now.

Sound good? Here are some simple tips to help you get to grips with money management right now, in your 20s:


 

Spend Responsibly

The most important financial habit you can learn at this early stage in your life is how to spend more responsibly. Make an effort to track your spending and perhaps draw up a budget, so that you know exactly how much you need to cover your bills, save a little for the future, and therefore, how much you can afford to spend on whatever you like.

 

A good way to put those everyday purchases that you think very little about into perspective, such as dinners out, daily coffees from Starbucks and weekly clothing shops, is to consider their yearly cost rather than their daily/weekly/monthly cost. Why?Because $4.45 per day for a coffee might seem like nothing, but when you work out that it adds up to $1,624.25 annually, well it really makes you think about your spending habits in a whole new light!

 

Build a Credit History

If you’re in your early 20s, you might not have much of a credit history. If you want to be able to get a home or car loan in the future, you will need to change this because having little in the way of a credit history can count against you when it comes to applying for these life essentials; it can also count against your when applying for jobs, too. Luckily, it is easy to build a credit history by applying for a low-interest credit card, using it for your daily purchases and paying it off in full at the end of the month, or even by using  http://refinancestudent.loan/ to take out a new, lower-interest loan to cover your student debt and build your history. As long as you pay it all back ontime every time, you should have no issues with doing so.

 

Set Up an Automated Saving System

Saving money can be tough when you’re young, and you’re just starting out, but you need to make an effort to do it anyway because the more money you save from a younger age, the more financial freedom you’ll have in the future and the less likely you will be to get into debt when you can dip into your savings. The easiest, most painless way to build a saving habit in your 20s is to set up a regular automatic payment so that a percentage (20 is good) is deducted immediately from your pay and sent to your savings account each month. By doing this, you won’t miss it nearly as much, and you’ll be far less tempted to overspend.

Build these healthy financial habits now, and the future will be much brighter for you.

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