Financial advice for 20 year olds

Most 20 somethings face large student loans plus credit card debt. If you’re living from paycheck to paycheck, these tips will help you reach your financial goals. Once you have set these strategies in place you will be more equipped to handle life’s many challenges and have a stronger financial future.

Budget – A budget can really help you understand how much money is coming in and how much is heading out. With a clear budget you will be able to live within your means and save some money for later. When budgeting remember the 50/20/30 rule. Which means that you can spend 50% of your savings on fixed expenses, like for example food, housing, insurance, memberships and subscriptions. 20% of your total income should be saved. While the balance 30% can be used for variable expenses, like for example dining out, travel and entertainment.

Money dates – Set up two days per month to review, manage and plan your funds. On these dates you should pay your bills (that are not auto pay) and look into your finances to see where you can save more or create a new financial goal.

Automatic savings – Most people find it hard to save, because they spend first and save last. This method will not help you reach your financial goals. Instead as soon as you receive your income, take 20% or more from your savings and put it into a savings account. Start with just $100 a month, by the end of the year you would have saved $1200, which is a substantial saving.