Are you a twenty-something who feels overwhelmed by your personal finances? You’re not alone. When you’re just starting out and learning to manage your money, there’s a lot to learn and many milestones to work toward. How do you know what to prioritize? What should you accomplish first?
Use this as your guide to goals. Gaining these achievements will put you in a great position for financial success throughout the rest of your life. If you’re in your 20s, start working now to accomplish these six money goals.
1. Aim for a Positive Net Worth
Many people are graduating from college and starting life with a negative net worth. Between consumer debts and the heavy burden of student loans, Gen Y needs to repay a lot of borrowed money. If you have credit card debt or student loan debt, create a repayment plan. Aim to pay off your highest-interest rate debt first; that’s the one costing you the most money each month.
The other way to move your net worth toward a positive number is by increasing your assets. The two best methods to do this is to: save money for emergencies and invest money for your future.
2. Have an “Oh Crap!” Fund of at Least $1,000
Life happens, which is why you need emergency savings. This is a cash savings reserve that you set aside to handle unexpected expenses and financial emergencies — without busting your budget that month or putting yourself into debt to cover costs.
Start by saving $1,000. This will cover a car repair, doctor’s bill, vet bill, etc. Then work towards three to six months of your net pay. Set up an automatic contribution to your savings so that you don’t clean out your savings completely if you have to dip into it.
3. Get Your Full Company Match
Think you’re too young to save for retirement? You’re never too young to think about securing financial stability for your future. Take advantage of any employer-sponsored accounts you have access to, like a 401(k), 403(b) or SIMPLE. Contribute at least enough to secure the employer match if it’s offered. That means if your employer will match 50 percent of the first 6 percent, you better be contributing 6 percent so that you get that 3 percent from your employer.
There aren’t a lot of legitimate opportunities in life to get free money, and a company retirement plan match is one of them — don’t pass it up. You can’t go back and get your match later on, so take advantage of it every year it’s available to you.
4. Open your own IRA
In addition to participating in your company’s retirement plan, you also should consider opening your own IRA. Individual retirement accounts come in traditional or Roth versions. Save what you can — even if it’s just $50 or $100 per month — and harness the power of compound growth while you’re young.
5. Establish a Side Hustle
Even if you’re working full time, you probably have a few extra hours in your week when you could be earning a little more money. Think of how much faster you could get out of debt or build your savings by earning an extra $500 or $1,000 a month through a lucrative side hustle.
There’s only so much you can trim your budget or slash your expenses, so sometimes it really is about earning more money. Often, a side hustle can turn into a full-time career that you love.
6. Protect Yourself and Your Stuff
No one enjoys thinking about worst-case scenarios — but part of being responsible with your finances is looking into what kind of insurance is appropriate for your situation, and protecting your family and your assets should anything happen to you.
You should also look into estate planning, even if you don’t think you have enough assets to warrant it. You likely have more than you think. And if you were to pass away without a will, everything would be settled in probate by a judge who will have no way to know for sure what you’d really want. If you want to have some say in what happens to what you leave behind, spend a few hours with a lawyer, and make your wishes clear.
If you have any questions, please feel free to contact us here, or give us a call at 1-877-672-4543.
Information in this article provided by, dailyfinance.com.