The twenties is a great age to be in for many reasons. You have finished your graduation, have started your first job and are enjoying your first paycheck. According to the best financial advisors, twenties is also a great age to set yourself up for financial success for life.
While some of us are careful when it comes to our finances, others do not pay much heed to it. The ones who are careful are able to plan their finances better. This helps them achieve financial security and independence. It also helps them overcome certain emergencies and unforeseen situations, which might arise in the future.
In this article, we are going to help you plan for your financial success when you are in your twenties. All the suggestions and discussions in the article have been taken from leading financial advisors as well as career counsellors.
Why you should start planning for your financial future early in life?
Whenever someone talks about savings to an individual in his or her twenties, in ninety percent of the cases, the answer is why now. Some people can’t even fathom the idea of opening a savings account and just watching their money sit there. The follow-up answer is that- I have my whole life in front of me to save, it is best to use the income I make in my twenties to enjoy what life has to offer.
Even though this might sound to be exciting and interesting, it is a bad decision according to experts. This is because starting to plan for your finances early on help you-
- Increase your savings and diversify the same in different areas.
- Improve your chances of making early investments and making your money grow
- Prepares you for any emergencies- death, accident, insurances and so on.
- Helps you take care of your family better (dependent parents and siblings).
- Encourages you to lead a healthy and responsible adult life.
All the above five points not only change your financial behaviour but also have a major impact on your nature and personality. Experts suggest that engaging in financial planning early on also helps you understand the value of money.
Two areas you should concentrate on your Twenties to achieve Financial Security
While the list of things you can do in your twenties is very long, advisors suggest that two things should be a top priority. According to experts, Savings and Investments, and planning about them should start early on in your life.
Savings is important as it helps establish the foundation for your financial future. In allows you to be discipline, train your brain, and enable you to seek proper planning. Investments are important as it helps you grow your already available finances. In other words, it makes your money grow even when you are not working.
Young people can look to make investments in interesting and exciting new fields like cryptocurrencies and technology. Investing in crypto is very easy thanks to the presence of credible trading platforms like Crypto Revolution. Investing in new technology like AI, ML and EV, is also catching up in a major way.
Areas you should avoid spending on in your twenties
While savings and investments are positive reinforcements, there are some areas, which are negative reinforcements. These areas primarily have to do with unnecessary expenditures. When we are young and, in our twenties, we always prioritize spending. Drinking out, getting that Lazy Fat Boy, spending on the latest PlayStation are all attractions, which are difficult to resist.
However, it is important that you prioritize your expenditures and budget for them accordingly. This will help you save a ton of money and invest the same in savings and investments. Lending money is also something, which you should look to avoid. In fifty percent of the cases, lending money comes as a bad debt.