A lot of financial decisions that you make in your 20s will shape the path of how your 30s is going to become! We are prone to making mistakes when we are young. From taking student loans to spending unnecessary money on shopping, you can make a lot of indecisions that might lead to a rocky start! But how to avoid that rocky start? Here are 7 financial rules for your 20s that will help you to lead a smooth 30s!
Credit card debt-avoid!
The big financial mistake many people in their 20s make is by having huge credit card debts! You should always have money in hand before you buy something. In this way you can avoid high interest credit card debts that will slowly eat away your finances.
Borrow only what you need
You might need to borrow money for your education, but be prepared to borrow only the minimum amount. You need to remember that once you graduate, you need to pay back all that money! The same goes for car and house. Simple house and cars will require only a minimum amount, so don’t get carried away with bigger houses!
Try to make a good credit history
Although you need to put a hold to your usage of your credit card, but don’t stop yourself from using it! Using your credit card once or twice in a month can contribute to a good credit score in the future! A good credit score will not only help you to get good interest loans but will also establish a good credit history!
Pay on time
Paying your bills on time is highly necessary as it can help you avoid huge interests! It will also help you to maintain a good credit score, as banks will feel confident in giving you loans.
Create a savings account
By opening a savings account, you are getting into the habit of saving from a very early age! So the best plan is to create a savings account that can help you to get a high return. Set a goal of putting a fixed amount into your savings account.
Get the idea of investing
Early 20s is a great time to learn about the basics of investing your money in the stock market. By gaining knowledge over the years, you will be able to implement it once you start your income. The things that you can search is:
- Investing in low-cost funds
- Using dividend stocks
- Using a taxable investment account at your advantage
Create a side business
At your 20s, you don’t need to create a big business. Start by something small such as a blog. By establishing this side business, you will be able to support yourself when you don’t have a job or are looking for it!
Just think of the financial burden that you will be relieved of if you follow these simple rules! Your 30s can be very smooth and you will be left without a debt! This will not only help you to lead a stress free life but will also help you to secure your future! So which rule are you going to start with?