Top 5 Financial Priorities You Should Have In Your 20's

Building an Emergency Fund

Hopefully, you are at a stage where you have been earning and can afford to take care of your weekly needs at a fairly reasonable pace. What would be important at this time is building an emergency fund for yourself. This would take into account all the monthly expenses that matter to you, and each month you would save this predetermined amount in an account set aside for this purpose. Add 5-10% extra on each amount to be paid, and in 6 months you will have a substantial amount of earnings.

Getting Rid of Debt

Debt is an unnecessary weight that can hold you back from using your earnings to your fullest potential. Upon repaying debt, you begin to realize that on a monthly basis, the money you spend for this purpose could have been used in your emergency fund instead, or in another way that could actually benefit you instead of being a liability. Your ability to move forward financially in meaningful ways is hampered when you owe.

Increase Your Income

As you add to your earnings, one thing becomes clear – the more you make yourself valuable to your job market is the more opportunity you will have to earn money. This can come from side jobs, getting a raise at your primary job, partnering with others to earn money passively, and even just gifts and endorsements from those who have benefitted from the work you do. Build a network and take care of it, and it will take care of you.

Using Credit Cards Wisely

When you swipe your credit card, you can easily put yourself in financial trouble when you delay paying back in a timely manner. More than student debt, credit card debt is even more of a hassle because of the higher interest rates that one has to pay. Someone with a bad credit score will have to pay a larger amount for a longer time than someone whose credit score is, at least, fair. An alternative, depending on your choice, is to not have a credit card at all even though they are useful tools to have.

Preparing for Retirement

All the financial education that you can learn in their 20s will develop patterns, lifestyles and habits that will extend your life and health, and prepare you for when you grow old and pass on from this existence. Retirement, though seemingly a long way off, is still an expensive endeavor and has to be viewed as a priority. Besides yourself, you also have to consider leaving a will and make decisions about what happens to your money after you die so that your family is not negatively affected by funerary expenses, in-fighting, etc. The best way to retire would be to do so self-sufficiently.

The Takeaway

Focusing on these top five priorities will see you being more financially successful and healthy with each year that you live. If mishaps take place, you will be protected; if life throws you challenges, you will be more equipped to deal with them. Going slowly but surely is the best recipe to accomplish the financial stability that these priorities will provide.

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