Your 20’s can be a tumultuous time in your life. You are just starting to get on your feet, starting your career and moving into ‘real’ adulthood. You are leaving your university days behind and making choices that will affect how you live in the future, on top of it all you might be experiencing a quarter-life crisis.
So how do you even begin to think about sorting out your money and making sure you are set up for a good financial future; when you can barely think about what you want for dinner tomorrow? Well, here’s a handy guide for you to follow that helps you get your money in order so that it doesn’t become a chore in the future.
By the time you are 23, try to have a weekly budget that you stick to. You’ll be likely to have started to earn some money, so a good rule of thumb is to make sure your bills and household essentials are covered first, then whatever is left over divide it weekly to make sure you know how much you can spend per week before you run out of money. If you can, try to save at least 20% of your monthly earnings.
By 25 you really want to address any credit you may have left lingering from your student days. If you have any student debt (excluding school fees) like those from a credit card, work on clearing the debt. You are also going to need to clear the debt from any store cards, as these often have the highest interest rates. The faster you get rid of these debts the more money you will save over time.
By now you should have moved up the pay scale a little so you should have some extra cash at the end of each month, which makes it a great time to start to save for a pension. If your employer offers a pension scheme, look into joining it and try to save as much as possible for your future. It may seem like a long time away, but consider the costs of old age – you might want need to retire early due to your health – would you be able to afford to not work?
You now might be thinking ahead to buying property and getting yourself settled. So you will need to save a hefty deposit to afford a mortgage at a good rate. Get your money up by always keeping your skills up to date, ask for a pay rise and start working on your side hustle. You’ll be needing to cut back on your lifestyle a little, so cut out any excess spending. You’ll soon find that the savings you have made will come in useful when it comes to paying for mortgage fees, solicitor, and estate agent fees and to pay your movers.
The big thing to remember here is that it’s never too early to get your house in order. Learning to manage your money at the earliest opportunity is going to put you miles ahead when it comes to your future, so take note make plans and stick to them, and you’ll reap the rewards when you get older.
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