When you are young, you might not be at the place you want to be financially. It might be intimidating to think about supporting yourself for the rest of your life. And you might not know what your finances will look like when you are older. The good news is that by following a guide for beginners and building a strong financial foundation now, you can set yourself up for success later.
Take Advantage of Your Peak Earning Years
Your 20s and 30s are your prime earning years, so take advantage of them to set aside as much for the future as possible. If you are savvy, you can start building wealth and allow that money to start making you money in the future. If your current position doesn’t pay that well, consider taking on a side hustle or even looking for another job. Consider your skills and interests and determine how you can get to a better position to bring in more income. Perhaps getting another degree will open up more job opportunities for you. If you are thinking about getting your degree, you can look to Earnest student loans to help pay for college.
Set Aside Funds for Retirement
You might feel retirement is a long way off, but now is actually the best time to begin saving. If you wait until you are older, you might not have enough time, and you may need to work into or past your 70s. You can set up a retirement account with your employer if they offer one. If you are self-employed full time, you can look into other options that allow you to set aside a portion of your income. You can promise to never touch this separate account until it is time to retire.
Living Below Budget
You likely already know what it means to live cheaply, especially if your income isn’t that high. Still, it’s a good idea to avoid moving away from frugality at any point. Make sure you can afford your housing and food, and try to buy generic instead of name brand when possible. It’s generally a good idea to spend less than you are planning to each month. The people with the most money tend to be the ones who live like they are poor and don’t have much money to spend. Of course, that doesn’t mean buying inferior products or living in an unsafe area just because this is the cheapest option.
Investing Your Saved Money
Setting aside money is great, but you should make it work for you. A savings account is a good starting point, but it may not allow you to take full advantage of your options. Look into both stocks and bonds to determine how they work and whether they would be a good option for your funds. You do not need to have a great deal of money set aside to make money through the stock market. When you have the right knowledge, you can put your money into investments. The advantage of doing so now is that they will have plenty of time to grow throughout your lifetime.
