This is a collaborative post.
You’re in your 20’s, you’re finally earning a decent amount of money, and you can at last start living a life of luxury – or can you? It can be tempting to purchase absolutely everything you’ve ever wanted without thinking of the consequences, but your future self will thank you for putting in a little extra thought about your future now.
Here, we have the financial considerations that every 20 something should be making. It’s never too early (or too late) to start thinking about your future!
1# Come Up With A Budget You Can Stick To
Start by coming up with a budget that you feel you can stick to. Budgeting doesn’t sound like fun, but when you do it right you can afford treats for yourself while making sure you’re paying bills, buying food, paying off debt and saving money.
2# Get Insurance
You may need different kinds of insurance depending on what you do and whether anybody is relying on you and your income. You may want to look at various insurance types, like health insurance and renters insurance. Doing this will protect you from expensive disasters that could catapult you into debt.
3# Build an Emergency Fund
Building an emergency fund will help you when you have an crisis. It’s for those unexpected things like car repairs, appliance repairs, and anything else that could otherwise encourage you to get into debt.
Many experts recommend saving at least 3-6 months of your living costs for your emergency fund. At the very least, you should save £1,000. This will give you peace of mind.
4# Retirement Savings
It’s never too early to plan for retirement – in fact, the sooner you plan and start saving, the better. If you imagine yourself moving and retiring abroad but don’t put a plan into place to make that happen, chances are you’ll end up exactly where you are right now.
Planning for retirement might seem morbid and no fun at all, but you’ll be so glad you did this when you know you can be comfortable and happy in your retirement years. You’ll make it much easier on your future self too, as you won’t need to panic save or invest.
5# Your Credit History
Building up a solid credit history is also important. You can do this by taking out a credit card, using a small amount, and then paying off the full balance before the month is over.
Just don’t do this if you can’t trust yourself! You can also achieve it by having a phone contract, and paying your bills on time.
6# Build Your Marketable Skills
You never know what the future holds or how things are going to change, so look at your marketable skills. Could you find another job if you found yourself without one? Aim to keep on learning throughout your life!
7# Avoid Debt
Although it can be helpful for your credit score, avoid dangerous debts like payday loans. If you save an emergency fund, you should have no need for them anyway.
If you plan for the future whilst you are young, your older self will thank you!