Have you just turned 20 and boasting with pride and happiness? Are you extremely happy after finally saying 'good bye' to the boring teenage years? Well, it is quite natural to feel good after entering into the age group of 20. After all, this is the time when you finally leave your college, and start making preparations to enter into professional life. You're finally independent in the truest sense of the word.
This particular age group is extremely vital. This is the time when you should start planning for your future. Keep it in mind that if you work hard and make proper financial plans during this time, then your future will certainly be very bright. Read along to know about some smart financial moves which you can make in your 20s.
Financial moves to make when you're in 20s
Check out the 5 smart financial moves which you must not forget to make in your 20s.
1. Build a nest egg: You're only in your 20s. You have lots of time in your hand. You have just begun your career and won't retire before 30 years. Start building your nest egg from now onwards. You're probably not married yet. So, you don't have to spend a lot of money for the family expenses. Save as much as you can at this age. Make sure you save at least 15% of your annual income by the end of the year.
2. Be self reliant: You're not studying in the college anymore. So, it is time you take your own responsibility. Your parents are always there for you. However, this does not mean that you'll still be dependent upon them. You should not take financial help from your parents. Get a full or part-time job in your city. Give your full focus towards your career.
3. Have control over yourself: Are you a saver or a shopaholic? If you're a saver, then there is no worry. However, if you're a squanderer, then you'll have to learn to have control over yourself. Close your eyes and think what you want to achieve in life. If you want to buy a grand house before getting married, then create a budget and mold your life accordingly. If you want to have a peaceful retirement life, then join a 401(k) or IRA plan, and start making contributions.
4. Give up your dream of buying a grand house: You may wish to buy a grand house for yourself by the age of 30. However, have you considered the amount you need to borrow to buy such a house? Probably not! Unless, you have a good cash-reserve ratio, you'll have to take out a mortgage for buying a house.
You'll have to pay a certain amount every month for paying off the mortgage. Moreover, you'll have to pay a substantial amount for the house maintenance. So, decide if you want to have $100,000 in your checking account or a 1000 square feet kitchen.
Buy a 2000 square foot house and invest the money in various markets. The profits earned from the investments can be used for necessary purposes.
Look at your grand parents. Do you want to live like them in your golden years? Do you want a much better life when you become a grand parent? If yes, then you'll have to take steps to achieve that kind of a lifestyle. Start saving from now onwards. This will help you become a rich grandparent one day.