Thursday, March 28, 2024

10 Things you should do in your 20s to take control of your finances

Thou shalt not be financially lost forever. It just may feel that way when you’re in young adulthood. Managing your finances for the first time can be overwhelming—what with the daily expenses, big-ticket costs such as housing and health care, heavy debts and long-term goals, including your ridiculously distant retirement.
The sooner you start making a financial plan for yourself, the brighter your future will be. “Building habits, especially in your twenties, is so important for long-term success.

You should do these things in order to take control of your finances:

1. Develop a marketable skill

Before you can start worrying about what to do with your money, you need to earn some.Think in terms of your career, not just a job. Because let’s face it: You’re probably not going to love your first job, and it won’t be your last job. But you should try to make the best of it.
The big thing is really to differentiate between your needs, your wants and your dreams.

2. Get insured.

Mayhem truly is everywhere, and as an adult, you are responsible for protecting yourself and all your stuff from it. When horrible things happen to you—say, a trip to the emergency room or a fire in your apartment—insurance may save you from shelling out thousands of dollars all at once.

4. Make a debt-repayment plan.

Debt is a reality for most young adults. But letting it linger—or, worse, grow—can set you back for years to come in the form of greater interest payments and lower credit scores.

For your student loans, be sure you have a good repayment plan in place. Work out a plan to tackle your credit card debt, too. Hopefully, being so young, you haven’t had time to bury yourself in much. But if you’ve been quick on the swipe, your first step is to establish a budget and rein in your spending. You should then start paying down debt on your highest-rate cards first.

5. Build an emergency fund.

Insurance alone won’t cover all of your problems. You still need to have liquid savings on hand as an added precaution.
The sooner you start saving, the better. Because of the magic of compounding, time will fatten up your retirement kitty. For example, if a 25-year-old saves just $100 a month, assuming an 8% return and quarterly compounding, she’ll have $346,039 by the time she turns 65.

6. Quit the Bank of Mom and Dad.

You love your parents, and what better way to show them than to set them free of your financial responsibilities? In your twenties, the main goal is becoming self-sufficient,Look to get off of your parents’ payroll and onto your own.

7. Clean up your online presence.

Time to put down the red cups, folks, or at least scrub them from your public image. Like it or not, your social media activity is view-able by the entire Web-surfing world, including all your current or potential employers. Get your digital act together by searching for yourself online.Add to your positive persona by pumping up the good stuff in cyberspace. For example, your LinkedIn account should be a glowing representation of your professional potential. And if you’re an expert on a certain subject, you can show off your knowledge via Twitter, Tumblr, WordPress or other sites.

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