If you’re in your twenties your personal finances could become overwhelming. When you are just beginning, learning to manage your money can be tricky. There is a lot to take in and a range of different millstones to work towards. But, how can you learn what to prioritise and what to accomplish first?
Have a read of these three points and by gaining these achievements, you will be at an advantage and on your way to financial success for the rest of your life. If you’re in your 20s, start working now to accomplish these money goals.
1. Aim for a Positive Net Worth.
Many people in their early 20s are graduating from college and university with debt due to student loans. If you have a credit card debt or student loan debt then you should work out your repayment plan to help you along the way.
2. Have a Saving Fund in Case of an Emergency.
We know that things can happen which is why you need to save up for emergencies. This is the type of account that you can dip into whenever something unexpected happens. This is the cash reserve whenever something unexpected happens. This prevents you from reaching your monthly budget and putting yourself in debt to cover these costs.
You should start by attempting to save about £1000 as this will cover things like car repairs, doctor bills and vet bills etc. You should then work towards three to six months of your annual pay. You can set up an automatic contribution to your savings so that you don’t end up having to dip into your savings.
3. Protect Yourself and Your Stuff.
Of course thinking about losing your possessions is not a nice thought, but sometimes you need to think about what you will do in unfortunate situations. It is fundamental to protect your family and assets should anything happen to you.
If someone relies on you financially then you will need life insurance for those dependents. If you own your own home, insuring it is essential but if you rent you should protect yourself and your stuff with renters insurance.
If you want to have some say in what you leave behind then you should spend a few hours with a lawyer to figure out what you wish to do.
Achieving financial independence is a goal most people strive for. It is not straight forward, but it’s achievable if you understand your priorities, set achievable goals and take the proper steps toward reaching them.
Written by James Conway
James is a content executive for PPI Refund, he describes himself as a Sci-Fi nerd with a passion for sharing his knowledge and expertise with a wider audience.