Smart money moves

When you are in your twenties, you are building a solid foundation for your financial future. The choices you make now will affect you for the rest of your financial life. Take the steps now to build a solid future for yourself and your family. Follow our these tips to help you successfully manage your finances over the coming years. And remember, it’s possible to enjoy your twenties while still planning for your future.

One of the best things you can do for your finances is to stop using your credit cards. It is too easy to get into credit card debt and it can take years to get out of it. Break that habit now. Stop using your credit cards, even for emergencies. Set up a good emergency fund instead. This will prevent you from having to pay off large amounts of debt, and waste money paying interest.  

You may be young, but you need to start saving for retirement now. The sooner you start, the sooner you will be able to retire. So open a 401(k) or IRA now. (And keep in mind that compound interest is on your side here.) If you start contributing to your 401(k) when you’re young, your money will have longer to grow. This means you can contribute a smaller monthly amount, but still end up with just as much money—if not more—than someone who contributed a lot each month, but started saving later in life. 

You would never go on a trip without a solid destination in mind. In the same way, it is important to have a solid financial plan so you know where you want to go financially. Then you can identify the steps you need to take to get there.

Your financial plan should include everything from buying a home to retirement. As you get married and have children, you will need to adjust the plan. Do not put off creating a financial plan just because you are single. You still need to have specific savings and retirement goals that you are working toward. 

As soon as you have paid off your credit card debt, you should start putting money aside to use as a down payment on a home. It doesn’t have to be a huge home or your dream home. But buying a home can help you build equity, which will come in handy later in life. 

Don’t worry if you still have student loans. You can buy a home and pay your student loans at the same time, as long as your budget accounts for it.

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