Putting Your Money To Work In Your 20’s
The time between 20 and 29 is vital when it comes to setting yourself up for financial security in later life. Of course, most people don’t realize this, and combined with their first steps in financial management means they can make a lot of budgeting mistakes during this time. Luckily, you can avoid these mistakes by reading the advice below on how to put your money to work during your 20s in the most effective way.
Do make a call on whether to buy or rent early on.
If you want a budget that works in your 20s, one thing you must do is make the call on whether you will buy or rent early. In fact, by knowing whether to buy or rent early on, you can help set out your finances for decades to come. Something that can help you plan and take actions in your life that will maximize your financial well being.
Of course, there are advantages and disadvantages to both routes. Although, investing in a property early on is still widely held to be the best move financially. The reason being that it gives you longer to pay it off, and you can also take out financial products against the value of your home if necessary. This being something that can provide added financial security throughout your life.
Don’t assume that education makes a difference in earnings.
We have all been fed the dream that getting a higher education will increase our earning potential in later life, and to a certain extent, this is true. After all, if we want to progress to higher status posts, extensive qualifications are often necessary.
However, while you may be at a disadvantage earnings-wise later on, if you do not go to uni, you may be able to make up for this in your 20’s. In fact, for those choosing to go into work or apprenticeships, salaries can be anything up to around 25K. Something that means they can save, invest, or get on the property ladder easily on and so make more money later in life, from what they earn in their 20s.
Do live lean in your 20’s.
It can be straightforward to get caught up with keeping up with the Joneses in your 20’s, easily with everyone showing off their luxe lifestyle on Instagram.
However, the key to successful budgeting during this time is to live as leanly as possible. In fact, there is no better time to do this than your 20’s because you will not have the same expectations regarding the quality of life you do when you are older. Additionally, you are less likely to have a family and other responsibilities that will drain your finances, making living-lean much easier.
Of course, you’ll still need to make that extra effort during this time. Something that may include doing things such as running an old reliable car, instead of buying a new one, and even keeping your old phone going on a cheap monthly plan.
Happily, it will all be worth it when you start to accrue a decent amount of savings. Something that you can then invest early and so has the best chance of being maximized for later on in life.