Starting your financial growth in your 20’s can give you a huge head start on many of your peers. The most important thing that you can do during this time is to educate yourself financially. Most people were not taught the basics of living financially as an adult in school but do have a grasp of trigonometry. Taking a proactive approach towards your financial health will also help reduce poor spending habits of which we all have a few in our 20’s. The following are tips that will help set you up for financial success in your 20’s and beyond.
Pay Off Student Loans And Credit Card Debt
Taking care of debt is paramount as soon as possible as it will help your credit as well as help you take out loans in the future. The best thing you can do is to create a strategy and budget your loan payments. Try to pay off the debt with the highest interest rate is important as this can compound quite easily. Most of the time credit cards are the debts that have these high rates so take care of these first. It can take you years to pay off a credit card even if the balance is just a few hundred dollars if you continually pay the minimum payment month after month.
Start Contributing To A 401K
A small contribution out of each paycheck will make a huge difference when it comes time for retirement. If your company matches your contribution up to a certain percentage then take advantage of this as it is basically free money. People that start in their 20’s contributing to their retirement fund allow that money to grow over the course of their professional lives. This is the large nest egg that most people rely on after retirement combined with their social security monthly payments.
Grow Your Money With Stocks
Participating in dividend growth investing can be a perfect way to grow money without too much risk. There are certain stocks that have produced a return for a decade or multiple decades straight. Diversifying your portfolio while young is important as stock with a little bit more risk can yield far great rewards. If you work in a specific industry and know a company is producing the right products or services investing in their stock is important. Of course this company is going to have to be publicly traded unless you are going to invest privately.
Live At Home With Parents Until You Can Put A Down Payment On A Home
Living at home with your parents is going to cut back all of your costs even if they charge you rent. Parents usually are more than willing to take in their child after college if they are working full-time, following house rules, and are saving money for a home. The ability to purchase a townhouse in your 20’s can be a huge financial opportunity especially if you find multiple roommates. This will help pay off your mortgage quickly and could even help pay it off by the end of your 20’s. This property can now be used as a rental income which will produce monthly which can pay the mortgage or part of the mortgage on a new home.
As you can see there will take quite a bit of self-restraint and sacrifice in a personal sense. The stress that you will take off of your shoulders by handling your debts and student loans will be immense. Enjoy being financially healthy in your 20’s as very few peers of yours can claim that.