All of us have goals in our lives- whether the goals are related to health, wellness, career, relationship, or personal achievement. Although finances might seem the last thing on your mind in your 20s, there are still some critical financial goals that you need to set in 20s to set yourself on the right path towards financial stability.
We understand that 20s can be a challenging age especially when it comes to your financial situation but that doesn’t mean that you can’t set up simple financial goals and work towards achieving them. Here is a quick guide of some of the savvy money savings goals that you need to set in your 20s.
Pay Off Your Debt
Regardless of your age, paying off your debt should always be among your top financial goals. At this moment, you might have just graduated from college, and you are staring at a massive student loan debt that you need to clear.
Sit down and come up with a comprehensive plan that will help you pay down your student loan or credit card debt in your life faster. Keep in mind that being trapped in a vicious cycle of debts can have a significant impact on your future.
Build an Emergency Fund
This is also another critical money savings goal that you should accomplish in your 20s. An emergency fund usually serves as an insurance policy for your personal finances and makes it easier to stick to your budget and avoid accumulating debt. For instance, you can use your emergency fund to cover an unexpected medical bill or living expenses when you lose your job.
Since you are still in your 20s and you might not be having a stable source of income, don’t be afraid to start small and grow your emergency fund with time. First, save what is sufficient to cover one month of expenses then slowly increase your savings to cover between three to six months of living expenses.
Start Saving for Your Retirement
It might seem funny to start thinking about your retirement while in your 20s, but it is completely logical. Although retirement may seem far off at this stage, you need to remember the fact that people who start saving for their retirement while still in their 20s and stop saving before they hit 40 ends up with more savings than individuals who don’t begin saving until they hit 30. If your employer offers a 401(k) plan, make sure that you take advantage of it and start preparing for your retirement early enough.
Start Learning about Money Management
One of the funny things about the modern societies is that even though money plays a crucial role in everyone’s life, most people don’t get any formal personal finances classes while in school. Most of us are left to learn through trial and error since even parents don’t talk to their kids about money management. This is quite unfortunate since knowledge is power.
Therefore, create time and learn about personal finances while you are still in your 20s as you prepare for the tough life ahead of you. Luckily, there is a lot of information available online that you will find invaluable as you pursue your personal finance education.
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