Hey there, future financial moguls! If you’re reading this, you’re probably teetering on the edge of your twenties or already diving head first into this exciting decade.
Welcome to the land of adulting, where the bills are real, the responsibility is heavy, and the financial decisions you make now can set you up for a life of luxury or a future of “Can I afford this ramen?”
But fear not! I’m here to guide you through the maze of financial wisdom with a sprinkle of humour and a dash of expertise. So, grab your coffee, put on your smarty-pants, and let’s dive into the five financial moves to make before you hit the big 2-5.
Start an emergency fund: Because life happens
Imagine this: You’re on your way to a job interview, looking sharp, feeling confident, and then … BAM! Your car decides it’s the perfect moment to break down. Now, unless you have a secret teleportation device, you’ll need cash — and fast.
An emergency fund is your financial safety net for those “uh-oh” moments. Imagine the relief of having a cushion to fall back on when life throws you a curveball.
Aim to save at least three to six months of living expenses. It might seem like a lot, but start small. Putting aside R300 a month can build a nice cushion over time. Trust me, future you will thank you when your car pulls a fast one again.
Tame the debt dragon: Slay it early
Credit card debt, student loans, car payments — oh my! Debt can feel like a fire-breathing dragon, but here’s the thing: you can slay it. The trick is to tackle it head-on while you’re still young and spry.
By taking control of your finances, you’re not just managing your debt; you’re mastering it. Make a plan to pay off high-interest debts first (I’m looking at you, credit cards).
Use the snowball method (paying off the smallest debt first, then using the freed-up money to pay off the next smallest debt) or the avalanche method (tackling the highest interest rate first, then moving on to the next highest interest rate).
Whatever strategy you choose, the key is consistency. Even smarter is not getting into debt in the first place. If you can buy an older car in cash instead of getting financing — do it.
Invest in your future: The magic of compound interest
If you’ve ever wondered why your grandparents are always lecturing you about saving, it’s because they know the secret weapon of wealth-building: compound interest. It’s like a financial superpower that turns your money into more money over time.
Start with retirement savings like a retirement annuity. Even if you can only contribute a small amount, the earlier you start, the more time your money has to grow. It’s like planting a tree: the best time was 20 years ago, and the second-best time is now.
Budget like a boss: Know where your money goes
Ah, budgeting — the word that makes everyone groan. But here’s the deal: having a budget doesn’t mean you have to live like a monk. It just means knowing where your money is going so you can make informed decisions.
Tonnes of apps make budgeting a breeze. Money Lover, YNAB (You Need A Budget), and PocketGuard are great options. Track your income and expenses and set savings goals.
This way, you can still enjoy your Vida without worrying about being broke.
Invest in yourself: Skills pay the bills
Your twenties are the perfect time to invest in yourself. And no, I don’t mean buying more skincare products. I’m talking about gaining skills that will boost your earning potential.
Whether it’s taking a course in digital marketing, learning a new language, or getting a certification in project management, investing in your education and skills will pay off big time.
Plus, it makes you more marketable and opens up more job opportunities. Remember, the best investment you can make is in yourself.
Final thoughts
Your twenties are a whirlwind of change, growth, and, yes, financial decisions. But by making these five moves, you’re setting yourself up for a future that’s not just financially stable but thriving. So, start that emergency fund, tackle your debt, invest in your future, budget like a boss, and invest in yourself.
Your future self will be forever grateful — and maybe even invite you to sip margaritas on that beach. Now go forth, young padawan, and may the financial force be with you! – Moneyweb
