Are you a 20-year old person who is concerned for your financial future? This 6 tips will greatly help you.
1. Pay off all your Debts
I know this sounds negative to focus on debts. But trust me, having no debt will be one of the best feelings you will have. No matter what people say DEBT IS BAD. You don’t need to borrow to buy better clothes, a car or a home.
If you have student debts – make it a mission to pay off everything Look at everyone who got wiped in the 2008 Financial crisis.
Lead a frugal lifestyle. This sounds boring. But trust me, saving is a habit, a positive habit. There will come times in life when you will need it. There are different numbers out there, I recommend 6 months savings.
3. Stop Chasing Easy Money
You will come across ideas,schemes,etc. that will show you how to make things quick and easy – penny stocks, forex,etc. I am not saying people don’t make money here, they do. But they get educated and they spent tons of time learning the ins and outs of what they are investing in. Warren Buffett, one of the richest men in the world- reads 3 hours a day – he reads newspapers, financial statements,etc. No wonder he wins.
4. Increase your earning Ability
It is possible to earn more. Get promoted, sell more, work part-time. I am not saying have 3 jobs, burn out. Learn more skills so you can demand more for your time and skills.
5. Lifestyle vs Things
Spending money on things – fancy clothes, fancy cars, endless drinking,etc. feels good in the moment. However, it does not add any value to your life. A $300 vacation is more memorable than a $300 shoe. You will always cherish that weekend vacation- but you will forget the fancy and expensive shoe you bought. Enjoy your life when you can but do it wisely.
6. Learn about Personal Finance
Pick up books about personal finance. Napoleon’s Hill Think and Grow Rich is a good start. Books by Robert Kiyosaki, David Bach, Dave Ramsey are places to start. However, don’t just follow one advice. Read from multiple sources and make up your mind on what direction to proceed.