Money-Saving Habits You Should Form in Your 20s
Your twenties are typically a decade reserved for partying a lot, learning how to be a functional adult in the real world, and for making dumb decisions (which oftentimes includes financial ones). Luckily, with these money-saving tips you can avoid the latter and set yourself up for success later in life! Your twenties are undoubtedly a paramount decade for determining what your financial future will look like, after all. No pressure or anything.
Start an Emergency Fund – Saving up extra cash is harder than ever nowadays as the cost of living continues to skyrocket. And unfortunately, many young people today are just one financial emergency away from being in poverty. Financial emergencies could include large medical bills, car payments, or unexpectedly losing your job. That’s why it’s important (if you have the ability) to put aside a bit of money every month into a savings account that you don’t touch unless in the event of an emergency. Whether that’s $200 or $25 – it’ll add up over time and you’ll be thankful you did.
Set up a Budget – This may seem like a no-brainer to you, but you’d be surprised by how many people (of all ages) don’t do this and end up majorly regretting it. Determining exactly how much you need to spend on the necessities like bills and groceries every month lets you set aside a concrete amount of money to spend on your hobbies without feeling guilty. Because let’s be real, no one likes the feeling of having spent way too much money at the bars and worrying if they have enough left over to cover rent for the month. Apps like Mint can help you see exactly what you’re spending your money on every month.
Learn to Cook – If you’re anything like the rest of us, your college years were probably full of instant ramen, dining hall food, takeout meals – and very little home cooking. Unfortunately grabbing takeout every night isn’t particularly sustainable when you’re on a tight budget, so it’s good to develop frugal habits early on – and that includes learning to cook cheap meals at home (rice and beans, anyone?). Trust us, you’ll save a ridiculous amount of money over time!
Set up a Retirement Fund – We get it, retirement is probably the last thing on your mind when you’re in your twenties. But unfortunately the years will inevitably start creeping up on you and you’ll wake up one morning in your 30s realizing you have zero dollars to your name in retirement savings (totally not speaking from personal experience or anything…). If your place of employment offers a 401(k), take advantage of it! If not, look into starting a traditional IRA.
Decide What You Want to Save for – Most people have certain financial goals they dream about – whether that be a new car, parenthood, or owning property. While those things may seem ages away when you’re in your twenties, it’s always good to start thinking about what you want to work toward. Once you’re financially stable enough to have that emergency fund we mentioned earlier, you can start thinking about setting aside some additional money every month for your dream financial goals.
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