Brought to you by USAA:
If you think that financial success stories are for people in their 30s, 40s, and beyond, think again.
As a 20-something, you’re more than capable of making strides with your money. There is no reason to wait until you’re older to take control of your finances.
With this in mind, here are four financial goals young adults like you can start achieving now:
Qualifying for a Great Credit Card
When you were in college, you might have received a number of offers for credit cards with low limits, insanely high interest rates, and an annual fee. Instead of relying on one of these cards to have on hand in case of an emergency, strive to qualify for and obtain a reputable card with a decent limit, fair APR, and no annual charge. If it offers a cash back bonus, all the better.
For instance, USAA offers the Preferred Cash Rewards Visa Signature Card that features a 1.5% cash back reward. If you’re really disciplined about paying off your balance in full each month, you can use the Visa for some of your expenses and get 1.5% back, which is basically like free money.
Paying off Your Debts
If you’ve accumulated some credit card and other debt, your 20s are a perfect time to pay it off. As Medium.com notes, focus first on whittling down your high-interest loans, and if you have student debt, pay more than the minimum whenever you can. To do this, you might have to take on a temporary side hustle and cut back on unnecessary expenses.
Building up a Decent-Sized Savings Account
Now that you’re working hard to pay down your debt, you should also start to build up a savings account that can double as an emergency fund. This type of account will handle the situations you might have paid for before with a credit card — like your car needing some work, a broken washing machine, or other unexpected financial expenses. As The Balance notes, your ultimate goal should be to have between three to six months’ worth of living expenses set aside, which is a lofty goal.
To start — and not feel overwhelmed — vow to set aside 2% of each paycheck to your emergency fund for six months. Then, try to increase that amount by 1% or 2% every six months until you’re setting aside at least 10% of your income into your savings.
Saying Goodbye to the “Paycheck-to-Paycheck” Way of Life
Another solid financial goal to achieve in your 20s is to stop living paycheck to paycheck. People twice your age often still live this way, so being able to do this now is a major accomplishment.
To do this, you’ll need to take a hard look at your expenses. Eliminate any and all unnecessary bills, like maybe the gym membership you don’t use often and a costly cable bill. Ideally, you’ll not only start to break even each month, but you’ll have a bit extra leftover as an additional financial cushion.
You Can Do It!
There is no time like the present to get smart about your money. Even if your parents didn’t seem smart about money until they were in their 50s, there is no reason to wait to take tangible steps to improve your finances.
By qualifying for a great cash back credit card, paying off any debts, working on a savings account. and living within your means, you’ll be heads and shoulders above many people your age while proving to yourself that you’re doing very well in life.