This article as posted on Lifehack by Amy Johnson. You can read the original article here.
Have you set your financial goals? Being in your 20s is an exciting time – you finally have the freedom to set your own rules, and you understand the value of independence. However, a big part of independence is being able to support yourself financially.
It is a great feeling knowing you are on track with your money, and now is the perfect time to start working towards financial security.
Check out 10 financial goals to pursue before you turn 30.
1. Focus On Paying Off All Of Your Debt
This does mean all of your debt; student loans, credit cards and any auto debts. All of these payments come with interest, and some of the interest is very high. Focus on paying off your debt first; the repayments and interest will keep sucking up your money until they are totally paid off.
Paying off your high interest debt makes hitting financial goals and saving money much easier, and you will feel great once you have made that final payment!
2. Create A Monthly Budget Plan
Saving and paying off debt is much easier when you have a budget plan in place. When you have a free evening, sit down and write down all of your earnings and expenses. Set money aside for rent, bills, food, entertainment, paying off debts and savings.
When you have a set amount of money to spend, you will notice you are saving money without having to think about it too much.
3. Stop Impulse Spending
Impulse spending can decrease your savings – as well as often being a waste of money! Before you buy yourself something, ask yourself these questions; Do I need this? Why? Am I paying for this with my weekly allowance, or with my savings?
A good rule of thumb is if you are paying with your savings, put it down. If you are paying for it with your weekly spending budget, come back the next day and buy it then if you still want it.
4. Set Career Based Financial Goals
It is likely you already have plans to advance your career and earn more money, but writing these plans down can help you to solidify them, as well as motivating you to work towards them. Try to set a rough time limit to achieve them, as this way you can check that you are staying on track.
5. Get Rid Of One Luxury
Most people have a few luxuries or treats they regularly buy. Try to track your spending for a month and see if there is any money that is being wasted.
For instance, many people buy lunch or coffee every day, but swapping to homemade can make a big financial difference. Try to cut out one luxury, and save the money instead. Keep your other treats as a reward for your savings!
6. Pay Your Bills On Time
One of the most important financial goals in your twenties is to pay your bills on time. Unpaid bills will leave you with bad credit, and they can pile up and become even harder to pay. Try to stay on top of the bill by setting up an automatic payment so you never miss another one.
7. Aim To Have Emergency Savings That Equal 6 Months Of Living Expenses
It may seem like a large amount of money, but through monthly saving you will eventually have enough savings to cover half a year of living expenses. The future is uncertain, and your life will feel less stressful if you know you have a safety net for worse case scenarios.
Try to also put your savings in a high yield account to benefit you financially as you save.
8. Save For A Home
It isn’t essential to save for a home in your twenties, but if you have paid off all of your debts it is often a smart idea. Saving up for a home takes a long time, and the sooner you start, the sooner you will be able to get on the property ladder – if that is something you are interested in doing.
9. Invest Wisely
Investing is a useful way to increase your savings, but be sensible if you are going to invest. Seek guidance from trained professionals, and let them support and guide you whenever you make investment decisions.
Try to take notes, too, as they will help you to make your own financial decisions in the future.
10. Start To Save For Retirement
While saving for retirement might feel like something you could put off for another decade or so, putting a small amount of money aside each month will make a huge difference.
It doesn’t have to be much at this point, so take a look at your budget and see how much you can spare. Even $10 a month will help to set you up for the future.
A general rule of thumb is to try and save 5% of your wage, and slowly raise that up to 20% over time.
