Saving money is important for everyone. Even kids should understand the concept of saving money as early as possible. However, the way you should save differs greatly as you grow up. Your changes in income, your lifestyle, new expense will change your ability to save and might even also change your motivation to do so. One of the biggest transitional times in your life is when you enter your third decade of life. Saving money differs significantly in your 20s and 30s as many major changes are occurring in your life.
In your 20s, you’re adjusting to life in the ‘real world’. You’re probably just graduated from college and getting your first job, receiving your entry-level salary, moving out from your parents’ house and paying bills by your own. You might be married or in the preparation to do it. You might also have been saving for buying a home or thinking about doing so.
With such serious things you should think in your 20s, you can’t manage your money just like you did when you were in college anymore. And here are a few tips on how you can manage your wealth, so you can settle down to a better life in the next decade.
Learn Self Control
If your parents have taught you about delaying gratification since you were young, you’re lucky. If not, you need to keep in mind but control your expenses on gratification will help you to keep your finances in order. Yes, you can purchase an item on credit anytime you want, but it’s better to wait until you’ve actually saved up the money. Which one is more important: the blue dress you’ve been eyeing since last month, or a bottle of shampoo?
Save for the rainy days
Once you receive your pay this month, it is important to save some of it for the rainy days. Don’t wait until the end of the month when there are few remaining pennies of your salary. Even if you can still rely on your parents for emergency expense, but it is an unhealthy habit to develop. Who knows that you need to go back to your hometown because one of your family members is sick, or your car breaks down and you need some money to fix it. At least, 10% of your paycheck should go to your rainy day funds.
Learn to establish a budget
Now that you have a decent income, you need to figure out how to divide up your budget. There are some for emergencies, some for bills, for weekly expenses, and entertainment. Of course, there will be room for discretionary spending, but without establishing a budget, you might be wasting more money than you can afford.
Don’t wait to invest
Waiting to start a retirement account until you feel like you can afford it might mean that you can never retire. You can also buy an insurance product to make sure that you are (gradually) preparing for your future. This doesn’t limited only to retirement plan or investment—you also need to have a health insurance to help you when you wind up in health problem.
The main point
You don’t need a financial degree or special background to become an expert in managing your finances. You know how much you earn, how you are going to spend, and what you need for your future. So, the solution of money planning is actually in your hand.