Disclaimer: The following is a sponsored post by Lexington Law. All opinions are 100% my own.
There is a ton of valuable information out there regarding financial advice. It can become overwhelming and you may not feel entirely sure what to work on in your 20's.
For millennials, many feel overwhelmed at finances. This is understandable since high schools are phasing out personal finance classes.
It's never too late to learn about personal finances and how to handle your money. However, sooner is always better.
Here are 7 pieces of financial advice to understand and work on, especially in your 20's.
1. Wait to make large purchases
It's easy to overspend in your 20's as you may not have handled money before. And since most people start their careers in their 20's, they may see a larger cash flow coming in and will want to spend that money.
Say you visited a shop and saw a coat you loved, but it costs hundreds of dollars. You may not even need this coat, but you buy it anyway, leading to impulse shopping.
A good tip to follow when making large purchases is to wait at least 24 hours before making the purchase. This ensures that you feel good about making the purchase and believe you really want or need it.
2. Credit score
Your credit score may very well be a make or break situation when it comes to renting from a landlord, landing a potential job, or taking out a loan. All of these people can deny you if they feel you do not have creditworthiness.
With Lex OnTrack, you can track and protect your credit, identity, and finances all in one place. You receive credit repair as needed, get a monthly score analysis of your credit score, personal finance tools, identity insurance, and a monthly FICO score.
If you feel that you have inaccurate items on your credit report, Lexington Law can help you remove those. They've helped clients remove over 10 million removals in 2017 alone.
Lexington Law has more than a decade of experience acting as advocates for consumers who need help repairing their credit and making sure they have a fair, accurate, and substantiated credit report.
3. Learn how to prepare for retirement
There's never a better time to start preparing for your retirement than in your 20's.
If you need help understanding what to do to start planning for your retirement now, I recommend reading this article.
Many millennials are neglecting their retirement savings, which is incredibly risky for these people when they get older.
4. Always be prepared for the unimaginable
Unfortunately, unpredictable things happen and could set you hundreds of dollars back.
To offset this, make sure you always have an emergency savings fund in place. This fund should be at least 3x your monthly living expenses, which will help take care of you for 3 things. If you already have 3 months of living expenses saved, I recommend saving 6 months as your next goal.
5. Find ways to have fun without spending money
Your 20's are a time where you go out multiple times a week to socialize. However, this can be damaging to the wallet since bars and restaurant outings quickly add up.
Instead of doing those things, find activities that cost no money at all.
This could be things such as:
- Volunteer at your local animal shelter, help your local clean-up crew in town, or visit a retirement home and find ways to help out there.
- Visit your community center or library and see what free events are going on
- Host a dinner party at your house and have everyone bring a dish
- Visit museums on free days
6. Don't live alone
In your 20's, you may feel that you're ready to move out and live on your own.
While it's becoming more of the norm to move back home with your parents to pay off student loans, you have many other options if you rather not do that.
You can find roommates on Craigslist, Facebook groups, or by posting a flyer in your community center.
Having roommates drastically brings the price of rent down, while also giving you friends that live with you.
7. Overpay student loans
If you can, it's wise to pay extra on your student loans to get your loans paid off faster. Not only does this bring your total down, but you'll incur less interest (which could be saving thousands).
Many people pay the bare minimum of their student loans, but this isn't necessarily the smartest thing to do.
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What's the best financial advice you've ever heard?
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