The days of our youth are some of the most enjoyable ones. But with much enjoyment and freedom is the need for responsibility. As I learned, it is best to be financially responsible from a young age. My 20s were critical in helping me get to where I am in life right now.
The general assumption is that in your 20s, you still have plenty of time, and there is no need to have a financial plan. Looking at it from the perspective of time, it is true, but it is false in an economic sense. Planning from an early age is the best guarantee that you will lead a comfortable life, whether you have to compare bridging loans at a later date or not.
Here, I share some of the lessons I learned about finances and the pitfalls you need to avoid.
Most people start saving for retirement in their mid to late thirties. Yet others wait even longer. Retirement savings plans usually work with a compound effect, meaning the sooner you start, the more benefits you get.
I was lucky to meet a friend who was working with a bank when I was still in my 20s. At this point, I was in my first formal job after graduation. He talked me into opening a retirement savings account as soon as I could. In a bid not to fail him, I did open one when I was 25. Looking back in time, that might have been the best decision I ever made for myself.
Most people in their youth never see the need to have a financial advisor. For the most part, our advisors are our closest friends who, if you probe well, do not have the best financial habits. I was in this rut too, and I cannot tell you how much it would have cost me later in life if I did not change it early.
Having a financial advisor is not a preserve of the rich, as many people may assume. If anything, there are financial advisors for every stage of wealth accumulation you are in. I was lucky that my friend who worked in a bank offered to become my financial advisor at a fee. With his help and insight, I could sort out my finances very early and set myself up for a comfortable life.
The age of technology has one huge misgiving; there is an information bubble that people don’t know what to do with. Most young people nowadays don’t know which information to trust and which one not to. When I was young, it was almost a similar case; people would share their testimonies of how they made money overnight through some shoddy investment.
Quick money is not reliable and will, more often than not, leave you worse off. Avoiding quick money schemes is one of the best rewards I gifted myself. I decided to choose trusted and steady investment options that offered security for my money. In that instance, it never seemed profitable. In the long run, however, there was no better decision than that.
Impulsive spending is the main reason why many people fall into a financial crisis. You must control your spending habits from a young age. This self-control will ensure that you only buy what you need and what you can afford at a given time. I learned the precious practice of budgeting early on, and it helped me shape my financial future as I dreamed of it.
One needs to avoid many financial mistakes when they are young. Cultivating good financial habits from a young age will guarantee a comfortable life without want later.
My name is Amy and i’ve been a passionate blogger about life, love and travel for many years. I first started blogging in 1997 and it’s been quite a journey since then. I keep my blog up-to-date on a weekly basis and you can also follow me on my Twitter account here: Hello