3 Key Financial Decisions to Make in Your 20s
Your 20s can be some of the most formative years of your life. While personal financial management might not be on the top of your agenda, there are many reasons why it is incredibly important to get right within this decade.
There are a number of essential financial decisions that need to be made in these years to help ensure you are well set up for the future. Not only will making such important decisions at this time help you out, it will also ensure future you and any family you may have are in a good financial place. Here are three vital things to do:
- Create a Budget
Creating a short and long term budget is a great way to stay focused on your financial goals and live within your means. To ensure you enter the next decade with enough savings to meet all your future plans, draw up a weekly and monthly budget for now, and a yearly one to help in the future.
Monitoring cash flow is vital, so you can be sure that more money is coming in than going out. This will help you work out anywhere you are overspending and to form an efficient budget. Use some free budgeting apps to make the process easier.
- Set a Savings Goal
Having a savings goal will make it a lot more satisfying to begin being sensible with your money. When you’re young it can be incredibly tempting to go out and spend everything you earn straightaway, but this won’t be productive in the long term.
Form a savings goal, whether it’s to afford a house, new car, and factor this into your budget. There are a number of different savings accounts, strategies and advice that can be used to get you started and ensure you stay on track to meeting this target.
- Insure Everything
Avoiding insurance is an incredibly easy and alluring prospect to save a bit of money and meet your budget and savings goals. However, it is one of the worst financial decisions you can make, especially when young.
Anything can happen, damage to your car, property, belongings or more, whether an accident or not, that will leave you out of pocket. Insurance can save you thousands, so be sure to get it for everything. It may not be a priority in your 20s, but in ten or more years’ time, having that extra money saved through insurance will be well worth it.