Are you prepared for a sudden medical emergency or unexpected vehicle repair? Almost half of all millennials admit to having nothing in their savings account.
The good news is that you are still young and have time to change your financial situation.
Need some money management tips? Here are five realistic money goals for people in their 20s.
1. Contribute to Retirement
Even though you are just starting out with your career, it’s never too early to think about retirement. In fact, the earlier you start contributing to your retirement fund, the better.
Most traditional jobs offer retirement plans or a 401K. If your job does, start investing in at as soon as possible.
You can choose a percentage to be taken out of every paycheck. Since the money is taken out of your paycheck before you see it, odds are you won’t even miss it. Even contributing as little as three percent to start out with will make a big difference down the road.
2. Save Where You Can
Wondering how you can save when your living paycheck to paycheck? The first step is to evaluate your spending.
Make sure you are living within your means and not trying to fit in with your wealthier friends. Eating out every day and drinking every weekend isn’t okay if that means you don’t have any money left at the end of the week.
Sit down and make a budget. Look for opportunities to save money. Try packing your lunch, canceling your unused gym membership, or make your own coffee at home. You’ll be surprised how quickly these unnecessary purchases can add up.
3. Build Up Equity
Now that you’re saving more money, you’re probably wondering what to do with the saved money. As a young person, you should start building up your equity as soon as possible.
This means looking into buying a home instead of renting. Instead of paying a landlord every month, you could be paying a mortgage. Then when you’re ready to move, you’ll have money invested into your home that you’ll see a return on.
Invest in other things such as vehicles with a long life ahead of them or anything valuable that will hold its value. Once you’ve purchased these items, don’t forget to ensure those valuables with something like Consumer Priority Service.
4. Start Investing
Once you’ve started saving more of your income, you may want to consider investing.
Today, there are apps and websites that invest your money for you. These are great for beginners who are unsure of the investing process but want to get started. The great news is that it doesn’t take much money to start investing.
Not sure where to start? Read this quick guide to investing for beginners.
5. Use Cash Not Plastic
Do you find yourself checking your bank account and wondering where all your money went?
Odds are you’re mindlessly handing over your debit or credit cards without paying attention to how much you’re spending. Studies show that you are likely to spend more money when using a card instead of cash.
Try taking your weekly spending allowance out of your bank account each week. When you have the cash in hand, you’ll be more aware of your spending and make smarter choices.
Wrapping Up: Realistic Money Goals
We don’t expect you to be a millionaire before you turn 30. But there are realistic money steps you can take now to ensure you have a healthier financial future.
Remember to contribute to your retirement fund and save money where you can. Start building up your equity and try investing some of your savings. Even using cash instead of your debit card can have a huge impact on your financial health.
Looking for more financial help? Check out our blog of money and finance tips.