Finance 15 March 2017
You're young free and single, and your 20's are your playground, but they're also a decade in your life that will count a whole lot towards your future. While financial planning may seem boring and unnecessary, the smart, savvy you will recognise the need to plan for a future that could be difficult and one where you may run into some bumps on the road. Here are five relatively easy moves you can make to make your financial future a more stable one.
Write Down Your Goals
Without creating a list of long- and short-term goals, it is impossible to determine if you are making the right financial decisions. Consider things like: ;
How you envision your retirement;
If and when you'd like to become a homeowner;
Whether you plan to have children;
Which debts you want to focus on paying off first
Credit Cards are a necessary evil. Choose yours carefully and monitor your spending with mobile banking apps.
And remember, you don't need to map out your entire life. These goals will change and evolve over time, but thinking about where you want to be in 1, 5, 15 years can help you hone in on what kinds of financial decisions you should be making day-to-day.
Start Saving for Retirement
I know what you're thinking. “I'm only in my 20s, I can save for retirement later, right?" Technically, yes, but it is in your best interest to start now. The sooner you start, the less you'll have to save, because the effects of compound interest will have longer to mature. This means you can contribute less and end up with more than if you were to wait to start saving in your 30s. Check with your employer to see if they have a 401(k) plan that you can make automatic contributions to through your paycheck. If they offer a matching plan, this is essentially free money, so try to contribute enough to maximize the amount they'll match.
Stop Maxing Out Your Credit Cards
Young adults are often guilty of treating credit cards like free money. There is often a “charge now, worry about it later" mentality when it comes to credit card usage. Now is the time to stop. Not only is this hurting your credit score, but it's costing you a ton of money in interest. Your 20s should be a time when you start taking your finances more seriously and thinking long-term. You'll also likely be dealing with a whole new set of financial responsibilities such as rent, utilities, student loan payments, perhaps a car loan – and worrying about how you're going to pay off a high credit card balance is the last thing you need to be thinking about.
Rather than charging a vacation or nights out with friends to your credit card, take some time to create a budget and determine how much you can reasonably spend on your social life and other indulgences, while still being able to save and pay for necessities. A credit card should only be used when you know you can pay off the balance in full at the end of the month.
Take Control of Your Credit Score
Excellent credit takes years to build, so if you haven't started building a credit history, or if you haven't used your credit responsibly, now is the time to start taking charge. Your credit score is calculated based on the length of your credit history, your payment history, the amount of debt you owe, the amount of new credit accounts you have opened, and the types of credit accounts you have. You can check your credit reports and score with each of the 3 major bureaus (Experian, TransUnion, Equifax). It is in your best interest to ensure you are on the path to having a great credit score so that when the time comes to borrow money (such as when applying for a mortgage or a car loan) you'll be seen as an excellent candidate to lenders.
Create an Emergency Fund
Life is full of ups and down and unfortunately that sometimes means unexpected payments. Since funds and income are typically somewhat limited in your 20s, you don't want to suffer a major setback when an unexpected expense comes your way. Instead, open a separate savings account and designate it as your “emergency fund". Ideally, an emergency fund should cover 3-6 months' worth of expenses. While it may take some time to build up, make this a priority so that you have it ready as your “secret weapon" when you need it.
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BLACK LIVES MATTER.
This is not a day for silence; it is a day of disruption. This is a not a day where you can just post a black square to your Instagram feed and breathe a sigh of relief like you've done something good for the day. The #BlackOutTuesday protest was created by Atlantic Records' Jamila Thomas and Brianna Agyemang of Platoon as a response to #TheShowMustBePaused, urging the music industry to hault normal operations for one day in solidarity with the current protests. As reported by ET Online:
"Tuesday, June 2nd is meant to intentionally disrupt the work week," they [Thomas and Agyemang] explained of the blackout. "It's a day to take a beat for an honest, reflective and productive conversation about what actions we need to collectively take to support the Black community."
So, do not just post that black square. Use this disruption in your usual social media feed to educate yourself on the current state of racial justice, make calls to your local representatives, sign petitions, donate to bail out funds, support Black-owned businesses, and put some actions behind that plain, black square.