What most people don’t realize is that your 20s are the most crucial time in your financial life. The smallest financial decisions you make or money habits you inculcate in your 20s can have a lifelong impact on your financial security.
You can either take your 20s seriously to get out of debt, build wealth and retire early or while away that time only to regret it later on in life!
This video will walk you through 5 key strategies that will help you work your way towards a lifetime of financial independence!
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1. Start Investing NOW
The earlier you start investing, the better! Let me give you an example.
Example: The Benefit of Compounding
If you started investing at age 20, and invested $100 a month until you’re 60, you would have almost seven hundred thousand dollars. But, if you waited until you were 40 to start investing, you would have only $77,000 by the time you’re 60 – only a tenth of what you could have gotten if you had started investing early.
2. Create a Budget
A budget is very important because it helps you track your spending, create savings goals, allocate money towards investing and helps stop overspending to ensure you live within your means.
This ensures you’re able to strike an optimal balance between your current needs & wants, and saving for the future.
3. Build an Emergency Fund
Bad things have a tendency to happen at the most inconvenient times.
What if you suddenly lose your job? Will you be able to pay the bills and buy essentials? What if you have to unexpectedly fix a leaking roof or a flooded basement?
An emergency fund is very important because it allows you to financially deal with unforeseen events, and gives you the peace of mind that an unforeseen event wouldn’t completely ruin your finances.
When creating an emergency fund, save enough money to pay the bills for 3-6 months. However tempting it might be to spend this money, it should only be used for emergencies.
4. Repay Credit Card Debt
Therefore, if you have any credit card debt, repay it as quickly as possible to greatly improve your finances in the long run.
For help with this, watch our video called “7 Easy ways to get out of credit card debt fast”.
5. Save Ahead Instead of Financing Purchases
Let’s say you want to buy a new Smartphone. Many people would use their credit cards to pay for it, even if they cannot actually afford the purchase.
How about a new couch? Stores make it very tempting to take a loan so that you can “buy now, pay later”.
But these are exactly the kind of pitfalls you should avoid.
Instead of using your credit card or taking out loans, save up for these purchases. You can set aside some money in your budget for future large purchases, and buy when you have enough money saved up. This will help you lead a financially secure, debt-free life.
Like with anything else in life, financial success needs consistency and discipline. The 5 strategies mentioned in this video are not a one-time fix but a lifestyle change, and adopting them in your 20s not only makes this change effortless but ensures the rest of your life is free of financial stress!
Did you find this video helpful? If you did, please share it with your family and friends so they can also benefit from these strategies and live a financially stress-free life!
And thanks for watching!