“I Am Too Young To Worry About Saving”…And Other Mistakes Twenty-Somethings Make
The best thing about being young is the feeling of immortality. When you are young, everything lasts longer, days don’t pass as quickly, and you have nothing but time. The problem is that by the time you realize that time is not infinite, you have wasted so much of it. If you are in your twenties thinking that you are too young to worry about saving for your future, think again. Many older individuals wish that they had a time machine for many reasons, one of them being they would have planned better for their future financial status. You may not be able to retire a millionaire by the age of forty, but if you invest wisely in your youth, it is very possible to do so in your sixties. The best way to invest is slow and steady just like the tortoise. Try these top ten tips to a financially secure future.
1 Allocate some of your paycheck
If you tell yourself that you are going to put money aside, there is no one to answer to if you don’t. We can all justify not saving money every month, but when you have it come right off the top of your paycheck and never being in your hand, then there is no way that you have the potential to use it for impulse buys. Let someone else take care of your savings by investing in a retirement fund that accumulates monthly from tax-free savings debited from your paycheck.
2 Don’t lock yourself up with an expensive car payment
The truth about a car is that it is nothing but transportation. The worst part about a car is that it is not an investment, it is always a detriment to your budget. Unlike other things you can buy like a condo or a home, there is no equity that you can build in a car. The minute you drive it off the lot, you are already in the red. Before you go out and spend the maximum on a car, be realistic. There will be plenty of time in the future when you can have the car of your dreams. When you are in your twenties, focus on building wealth so that you can enjoy it thoroughly when you have the time to do so.
3 Lock up your cash
The best way to invest is out of sight and out of mind. CDs are a great way to save your money. You can put as much or as little as you want, but the key is that you can’t touch whatever you allocate. You can’t succumb to temptation and best of all, you can’t lose money. Not only will you be guaranteed your investment without loss, but you can also make a little to boot. Also, if you are looking to build your credit, a CD is an excellent way to up your credit score.
4 Housing is still a safe bet
If you can, it is best to buy real estate Winnipeg instead of rent. Even with the housing market crash fresh in the minds of many, buying a home is still a safe investment if you buy smart. Building equity, you aren’t just throwing money at a rent that you won’t ever get back. Making a mortgage payment is an excellent way to build something for your future and have some money when you want to move up and out. If you rent, you will have nothing to show for it but some couches and a bed.
5 Set a budget and stick to it
The biggest saving saboteur is revolving credit card balances. Always make sure that when you buy something, you can pay for it in cash. Major purchases shouldn’t ever be outside of your means. Carrying heavy debt will not only lead to high-interest payments, but it will also likely lead to overspending. Before you buy anything, ask yourself if it is a want or need. Needs are those things you can’t live without. Wants are those things you should only spend on when you have cash on hand. If you find yourself using your credit cards and not paying them off, take out a set amount of cash every month and promise never to spend more than you have available. Living within your means is the best way to save for the future. It makes no sense to worry about putting twenty dollars away monthly when you owe thousands in debt.
You are never too young to worry about your financial future. Incremental savings can add up really quick, and lead to a secure and wealthy financial portfolio.