Ok, fellow twenty-somethings. It’s time to have the talk. It’s time to get real and deal with the situation at hand. It’s time to seriously think about your financial future.
But how many of you hate to even think about money or investing or your low balance in your bank account? Believe me, I do. I understand. I am one of you. Student loan debt, credit card debt, a tough job market, a greater responsibility to secure our futures: the financial struggle is real and affects the majority of our generation.
But let’s not get too depressed. The topic of money can be overwhelming, but it doesn’t need to be. Here are 5 strategies that will help you conquer any financial hurdles you may face.
Save, Save, Save
This might seem like a no-brainer, but saving is much easier said than done (i.e. why does rent have to be so expensive?). To make it less of a burden, you can set up automatic withdrawals during every pay period into a savings account. By setting aside a specific amount every two or four weeks, the temptation to spend that money should be significantly reduced. It’s like that phrase “out of sight, out of mind”: money will be saved before you get accustomed to spending it.
Retirement may seem far away, but it is important to start saving for this time in your life as soon as possible. Take advantage of the benefits of compound interest, a seemingly magical equation that can make a retirement account increase in value.
Budget Your Money
Budgeting is a tedious task, but it allows you to see how much money is coming in and out every month, helping you fight the urge to splurge on shoes you don’t need (I know those cute heels are on sale, but they’re still $100. You need to eat this week, too.) or expensive nights out on the town (just say no to those overpriced shots and mixed drinks).
Today, there are a ton of apps you can use to help budget. Apps like Level Money, You Need A Budget, BUDGT, Spendee, Expense Manager, One Touch Expenser, Goodbudget, and Mint Personal Finance are just the beginning in a long list of tools to help you budget your money. They range in price from free to $1.99, and are available for iOS and Android.
Use your tech-savvy skills to your advantage. Not only can these apps help you track your money, but they will also make saving easier.
Assess Your Debt
Like I said above, many of us are dealing with overwhelming amounts of personal debt, making saving and budgeting our money seem impossible. In order to overcome this particular financial burden, you should first assess your debt. Organize it depending on interest rates, and begin paying off the debts with the highest interest rates first.
Remember, though, to give yourself realistic payment expectations. The amount of debt varies from person to person, and no two payment strategies will be the same. Be practical and reasonable about the time it will take to become debt-free.
Manage Your Credit Score
Since your credit score affects nearly everything in your financial life, always take mind of it. Monitor your score so you can see where you stand and what you can do to improve it if necessary.
As with budgeting, apps are available to help with this task. Mint Personal Finance, mentioned above, not only helps you create budgets and pay your bills, but it also provides you a free credit score when you make an account.
Make An Emergency Fund
We all know life comes with unexpected choices and curveballs. They seem to always happen to us when we least expect it. You might not ever be able to predict these moments, but you can help yourself deal with them when they do happen.
Create a fund or an additional savings account for the unexpected instances in your life. It might be a car purchase, a spur-of-the-moment vacation, or a move to a new city. Whatever it may be, make sure you are prepared to take them on. And creating a fund for emergency purposes will also help you avoid more personal debt.
Our generation—the somewhat-despised twenty-somethings—are up against unique financial challenges. However, more than ever do we have resources available to us to help surpass these obstacles. Managing our money does not have to be challenging. By making smart, realistic decisions with our finances, we can more easily achieve financial prosperity.
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