Your 20s are a great time to live it up—travel, experience new things, and grow as a person. It’s also the perfect time to start saving money. It may seem unnecessary now, but saving money now is essential to your future. In your 20s, it’s perfectly acceptable to not have it all figured out yet, but it’s a good time to build a financial foundation when you do.
List Your Monthly Expenses
Do you pay student loans? How about rent? These are just two of the heavy financial burdens that most 20-somethings struggle with today. With this already in mind, the best place you can start is by sitting down and listing out all of your necessary expenses. Make a note on your smartphone or write it down the old fashioned way to make sure you pay off your monthly obligations.
One of the most important things to pay attention to is your debt. If you want to achieve all of your big plans like travelling around the world, you need to come up with a solid plan on how you’re going to handle any debt you might have. You may even want to consult a financial advisor or tax professional to help start you on the right track.
Use a Budgeting App
Apps aren’t just for playing games and checking up on your friends. Today, there are hundreds of apps available to help you organize your life and get your finances in order. Apps like Mint, You Need a Budget, PocketGuard Budget, and GoodBudget all provide top-notch services to their users with integrated budgeting technology. Mint is one of the most popular apps because it instantly connects to your bank to create the most accurate real-time information. This app will send you routine tips for customized budgeting and alerts to any unusual charges.
Give Yourself an Allowance
A budgeting app is useless if you don’t invest time and effort into it. So how do you budget? You need to first take a hard look at any unnecessary spending you do every month. Once you download an app or take a close look at your monthly expenses the old fashioned way, you can identify the realities of your expenses. You’ll quickly notice how much you spend on cold brew coffees every morning at the local Starbucks or how much those dozen tacos add up on Taco Tuesdays. There’s nothing wrong with a little fun spending, but you should limit your budget to make sure you have some in your savings at the end of the month.After all, there’s nothing worse than missing a spontaneous trip to Mexico with your friends because you out-spent yourself and your account dried up.
Set Goals for Yourself
What are you saving for? This answer will be different depending on the person. Perhaps you want to live an adventurous life abroad, start a business, or save up for a home and a family. You may even want a little bit of everything! There’s no reason you can’t achieve these things if you prepare yourself now. After all, your goals don’t just happen on their own. Set up the stage now so that you can transition sooner into these phases of your life without racking up debt or putting yourself in unnecessary financial restraints. Other goals like saving for retirement may seem irrelevant now, but there’s no reason you can’t start investing in a retirement account now. If these possibilities are dizzying, consider hiring a tax professional or a financial advisor. These experts help you create a plan if you end up owing the IRS, analyze your finances, help project your financial future, and design a plan to keep you financially secure.
Saving is all about the small goals too. When you create a budget, you have freedom to spend your allowance on anything you want. That could be a new pair of shoes, an extravagant night out with friends, or a weekend getaway. Give yourself short term goals to help you move forward and still have the time of your life in your 20s.
Saving money may not be fun in the short term, but you’ll thank yourself later when you’ve managed to balance both fun and responsibility in your life.
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