Gone are the days when people had the pejorative to make mistakes during their 20s, fixed these mistakes in their 30s and continued to inch towards the white-picket-fence dream. We are in 2019. The economy hasn’t fully recovered from the aftermath of the recession and jobless growth is a pressing concern for the policymakers.
Every youngster must understand that making financial mistakes early in their life could cost them dearly in the future. While it may be difficult for them to refrain from mistakes as people don’t commit mistakes intentionally, it just happens, they should try their best to avoid them.
Mistakes related to money
As mentioned earlier, mistakes that involve money are regrettable, hence, it’s best to avoid them. To avoid such mistakes, one needs to manage money effectively. If he can do that during his 20s, he’d reap the benefits later in life.
How do I manage money in my 20s? It’s a question frequently asked, but seldom answered.
In this article, I’ll search for the answer. So, keep reading.
Managing money in 20s
The common wisdom that young people spend extravagantly is true to an extent. Pub crawl, parties, hooking up, going on dates are what people in their 20s mostly do. There’s little surprise that their wallets mostly stay empty. I am not saying all people in their 20s party all day, but a large number of them do and it prevents them from managing money more effectively.
A person in his 20s must spend most of his time hunting jobs. Unless you are a millionaire in your 20s, the only way you can make money is by working in an organization. There are other sides of Job hunting. It can escalate your odds of learning new things. In addition, it also gives you a fair insight of where you stand in the competition.
Acquiring new skills
Job hunting becomes easy when the candidate evidences professional skillset. Other things i.e. educational qualification, industry experience, etc being equal, the emphasis is put on how many skills the job candidate has mastered and on what level.
When a person dedicates their younger years acquiring new skills and mastering those skills, later in life they can use that as a capital in the professional arena. If someone spends his early or mid 20s learning skills that are deemed necessary by industry thought leaders, in his late 20s or early 30s, he can be comfortably be placed in an large enterprise as an indispensable asset.
Paying off credit debt
The previous tips are not directly related to money management, even though they make it easier to earn and manage money. But paying off the credit card bills on time is an an important tip for managing money and all 20-year olds should recognize its importance.
Do you know about the damage caused by unpaid credit debt? Most people in their 20s are blissfully ignorant of it. Credit debts are like a black dot on your credit record as they make it difficult for you to get loan. And one more thing; lenders normally don’t discriminate between unpaid bills and bills paid after the due date was over. They do, but they disappoint both types of card holders by refusing to lend them money.
On top of it, statistics indicates people who max out their cards are mostly in their 20s. If you are young, you are likely to run into credit card debt. Steer clear of all the debts and don’t let them stay on your report for long.
Build outstanding credit
If you are in your early or mid 20s, you have plenty of time ahead in life. Instead of asking how do I manage money, use this time to build excellent credit. Use your card diligently. Never max it out. Try spending more via cash. Limit your online transactions and never ever miss a bill paying date.
Oftentimes, we stay busy and forget the bill paying date. To make sure it never happens, you can automate the process. Set up reminder alert on your mobile phone or use custom software. There are software available for it, accessible via a subscription model.
Create a monthly budget
Its importance cannot be overstated, especially for people in their 20s. By creating a budget every month, they can manage their money more effectively. A budget, especially if it is developed with the help of right software, can not only show you how much you are spending every month but also figure the ways you can save money. The biggest benefit of creating monthly budget is that it becomes a habit. In your 30s, 40s and 50s, you can manage money even more effectively thanks to this habit.
Summing up
I guess you’ve gotten your answer by now. If you are curious to know how to manage money in your 20s, understand that it’s the result of a serious attitude, a knack for saving and not caving in to the lure of instant gratification. Follow the tips given here and manage money better in your 20s.