The 20's are all about having fun. It's that time in your life when you feel that you can do anything you want before the weight of responsibilities bogs you down a bit. The world is your oyster!
While you are enjoying this phase of carefree 20's, it is important not to get too carried away, especially in terms of your finances. A lot of women in their 30's and 40's regret not being financially smart in their 20's. If you are a 20-something woman who has not given a second thought about savings, expenses, and all that serious money talk, then these 7 bits of financial advice are for you. Listen up!
1. Save for a Bad Hair Day
Forrest Gump's momma once said, "Life is like a box of chocolates. You never know what you're gonna get". The wise woman understood the unexpected nature of life. Bad hair days, aka financial emergencies, come unannounced. You need to stash some money aside to create an emergency fund that keeps you afloat for 3-6 months.
2. Discounts Are Cool, but Savings Are Cooler
Many of us think buying discounted stuff helps save money. Well, that's not entirely true. Brands lure us into buying things that we don't need by offering discounts and trick us into believing that we are saving money by spending more money. The best way to build your savings is by budgeting and cutting corners on major expenses such as buying food or drinks from restaurants and cafes, impulse shopping on credit cards, paying a hefty sum for car insurance, etc.
3. Plan Your Retirement before Age Catches up with You
Age is just a number, right? Maybe not. While we agree that women can do a lot of things irrespective of their age, there is no denying that we all grow old, and our bodies become weak. Until you have found the elixir of youth, the age will catch up! But the more important question is, 'do you want to be working to pay the bills till the last day of your life'? If your answer to that question is no, then you need to plan your retirement immediately. Women who start saving and investing for retirement in their 20's have a good chance of accumulating more money and even retire early.
4. Don't Ignore Life Insurance Cos YOLO
For years, the term YOLO has been associated with taking risks and putting yourself out there. It's time to change the meaning of YOLO and put a responsible spin on it. Life is transient, so you need to figure out how to take care of your family and loved ones once you are gone. Don't ignore life insurance like thousands of other young women. You have one life, but a lot of other lives depend on you. Protect them with life insurance while you still have time cos YOLO.
5. Beware of the Credit Card Trap
In the world run by plastic money, we heavily rely on credit cards to shop and pay for bills and utilities. And before you know, you have accumulated a sizable amount of credit card debt that you will struggle to pay for months or even years. It's what we call 'The Credit Card Trap' and it can disrupt your financial stability. Use your credit card wisely and sparingly. Keep track of how much you spend on credit cards, and pay the outstanding balance before the debt turns overwhelmingly huge.
6. Don't Let Peer Pressure Affect Your Finances
We all have faced peer pressure while growing up. But, sadly, it has followed us into our adult lives as well. We often tend to spend more money on food, parties, and expensive trips under the peer pressure of our friends, without realizing that it is negatively impacting our finances. Keep distance from spendthrift friends and remember that you decide what you do with your money, not your friends.
7. Maintain Financial Transparency in Your Relationship
The 20's are the years when you are looking for meaningful, long-lasting relationships. Before you enter a serious relationship and start planning your future with your partner, it is important to discuss money matters to understand what you are getting into. You and your partner need to lay all the cards on the table when it comes to finances so that you are not surprised when some unexpected debt pops up. Financial transparency early on in a relationship will save you a lot of time, money, and would safeguard you from hurt, heartbreak, and regret.
We often hear phrases like living in the present, being spontaneous, or taking life one day at a time. While these are not bad pieces of advice, they don't hold true when it comes to planning your finances. Take charge of your money to enjoy its benefits in the future. After all, you reap what you sow!