As a young adult, your 20s can be a life-changing decade. Whether you’re entering the workforce straight away or attending college with the intent to find work after graduation, your financial decisions will play a role in determining your future when it comes to your spending, saving, and your investments. Generally speaking, it’s accepted that most adults in their 20s have a lot to learn about money, and this time in your life is the best time to develop a healthy financial foundation that will carry you into your 30s and beyond.
Getting started is easy, and there’s never a wrong time to start working on these habits. Here are a few we recommend.
- Manage your budget by keeping it small. Once you’re in the workforce and ideally making more than what you were earning in college (or what allowance you received from your family), it’s naturally very easy to increase your spending without thinking. However, saving money in your 20s can translate to greater savings and earnings on said savings, which can be used for a new car, a vacation, or paying off student loans. One way to keep your budget slim is to check your monthly statements and see how much money you have by the end of the month – and cutting out any frivolous expenditures that may have affected your balance.
- Start saving for retirement. When you’re in your 20s and new to the adult workforce, retirement seems like a lifetime away. However, developing a retirement plan early will in turn increase the amount you’ll have when you do retire, which can affect what age you’ll retire at. If your employer offers a 401(k) with a matching program, it’s a good idea to take advantage of this benefit. If not, Polam’s IRAs have flexible term options with no monthly or annual fees, which will help you maximize your earning potential.
- Identify and hone in on your spending goals for the next few years. Some people in their 20s want to own a home. Some want to explore the world before getting their feet wet in the professional world. And some want to get married and start a family. Whatever the case may be, while you’re earning and saving money in your 20s, you need to have a plan that can help with specific big spending goals. Identify the costs you expect to accrue and set up an account for the money you save. Polam’s Vantage Savings accounts can help, with a low opening deposit, no monthly or annual service fees, access to online and mobile banking.