Smart Money Tips For A Smarter 20-Something Life

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Smart Money Tips
Here are 10 money tips for the 20-something. Credits to Chinkee Tan.

Life in your 20s is both exciting and complicated. It is that awkward stage of letting go of your adolescence and being a responsible adult. If you just entered your 20s recently, welcome to this challenging yet fulfilling phase of your life! You have probably graduated from college. Or maybe you are still on your way to get the diploma you’ve been studying hard for.

Regardless, it is the age to find your first job, receive your first paycheck, and decide how you would like to spend your first hard-earned money. Now, there is a big question many young adults are still struggling to answer: how would you live well in your 20s while being responsible for your finances?

If you are currently under this age group, I will share with you the hacks to practice healthy finances in this decade of your life and ensure yourself of a brighter life as you age further.

Be a skillful, marketable professional

To start your journey as a financially responsible adult, you will need to find yourself a decent-paying source of income. Get that diploma, attend workshops and training with certifications, or try working freelance. A college graduate or not, you sure can earn something from your skills, provided you know how to market yourself well.

Be a marketable professional. Once you get yourself a regular job or business, consider having a side hustle. A side career lessens the risk of you becoming a jobless, income-less individual. It is also a good strategy so you will have an alternative source of income, allowing you to earn and save more money. (READ: 10 Places Where The Rich Place Their Money Part 4)

Set and focus on your priorities

You figured using your marketable skills can give you profits, now you need to figure out your next priorities in life. Is it paying your debts? Starting a savings account? Investing? Traveling? Or spending your hard-earned money on shopping and entertainment?

Learning how to categorize things according to their priority level in your life is an important habit to practice as early as now, so you can master and make it a part of your life system as you grow older.

Think about the purpose of your money: Where do you want to spend it on? What do you want to accomplish with your money?

Prioritize your needs and savings over your wants. It’s okay to splurge sometimes, it’s okay to purchase things for your pleasure if you would not regret them later. And if you do not end up having zero balance on your bank after spending your money. (READ: Things To Prioritize in 2020)

Open and manage your own savings account

You are in your 20s, you are now an adult, you are now earning your own money. It is only right that you open your own bank accounts and manage your own finances.

When creating a bank account, look for banks with a good savings account background. Set a regular schedule of depositing money into your account. It doesn’t matter if it is a hundred peso or a thousand peso per deposit. What matters is you have savings that are continuously getting filled up with your hard-earned money. (READ: How You Can Improve Your Savings By Being Mindful)

Avoid using a credit card

One of the best ways to be responsible with your money is to avoid being dependent on credit cards. If you don’t have a credit card yet, many things will soon tempt you to avail that card. Avoid the temptations, as much as possible.

If you are already a credit card user, assess if you really need it and if you can still pay your credits on-time. If not, take a deep breath and stop using the card. Cut it before it cuts you and your finances.

A credit card is not a debit card. It is debt-card. Interests exhaust our savings. Do yourself a favor, be debt-free as much as possible. If you really need to borrow money, make sure you are capable to return it on time.

Use your credit card responsibly

Here is the real thing to those who already have credit cards: There is nothing wrong with using one if you know how to use it responsibly. Remember, the money you get from credit cards is not your money. It is borrowed money. Again, borrow money only if you need it and if you can afford to pay immediately or on the due date.

Paying your credits on time helps you build a good credit history. A good credit card history gives users many benefits: better interest rates for future loans, better insurance rates and security deposits, and a better image in case a company you are applying a job for does a background check on you.

Credit cards are supposed to help you with your financial needs, do not let it put you in a swamp of financial problems. (READ: Top 5 Money Issues That Can Kill Your Marriage)

Pay your bills on time

Credit card bills, electricity bills, internet, and cable bills, rent, phone bills… when you reach your 20s, reality will hit you that there are plenty of bills in the world. And yes, your parents can no longer help you in paying those bills.

Paying each bill on time is vital. It is a habit you must practice consistently. Delaying your payments may result in additional charges, penalties, and bigger headaches. (READ: 5 Bad Money Habits That Will Make You Poor)

Learn the art of investing

There are many ways you can invest your money and acquire bigger things in return—from mutual funds to the stock market. Do your research and assess which ones are affordable and doable based on your goals and financial capabilities. Learning about investing at a young age lessens your financial worries in case you experience any economic stability issues in the future. (READ: What Is The Best Investment Today?)

Get a life insurance

Life insurance? In my 20s??? Isn’t it impractical for me to put my money to insurance when I’m still young?

If this is your current mindset about getting a life insurance, well, you are not alone. Investing on life insurance at a young age has been considered impractical by many for so long. However, when they reach 30 or 40, believe me, most of them are regretful for not getting life insurance while they are still young and healthy.

Truth is, if you are younger and healthier, you have higher chances of getting better yet affordable life insurance package. Purchasing a life insurance in your 20s saves you from a lot of headaches when you decide to settle down and build your own family few years later. Why? Because you already established the financial protection of your future family at an early age. (READ: 10 Places Where The Rich Place Their Money Part 2)

Build a retirement fund

Retirement account? In my 20s? I just started my first job, why do I have to think about retirement at this young age?

Most people in their 20s have the same thoughts about life insurance and retirement funds: It is not a need yet. A few years later, most of them have the same regrets too: I should have invested my money on those things when I was younger.

Friends, if you want a better future, it is a good idea to save up for your retirement as soon as you start earning income. (READ: The 5 W’s I Wish My Parents Knew Before They Retire)

Build an emergency fund

Of course, your savings, retirement fund, and your life insurance cannot save you from all your problems, especially during an emergency. Chances are, you will still need an extra source of funds in case of emergency and unexpected events.

It is highly recommended that you start building your emergency fund as early as now. Do your best to reach an emergency fund amounting to three to six months’ worth of salary. This way, you can easily cover your emergency expenses. (READ: 3 Reasons Why You Need An Emergency Fund)

Now that you are in your 20s, let me help you learn as much financial knowledge that you need to be a debt-free and wealthy individual. Get the Piso Planner Kit with P60k Ipon Challenge guide for only P499 and you will also get a copy of Diary of a Pulubi and My Ipon Diary for FREE! Visit www.chinkshop.com for more details.

THINK. REFLECT. APPLY
What financial challenges have you experienced (or currently experiencing) in your 20s?
How can you overcome those financial struggles?
What money-saving technique is the most advisable for people in their 20s?

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Chinkee Tan
Chinkee Tan is a top Filipino motivational speaker, wealth and life coach whose goal is to inform, educate, motivate, and disturb. His vision is to help people become financially-literate and debt-free. For more info about Chinkee Tan, please visit his fan page at FB, Twitter and Instagram. Also follow VIBER PUBLIC CHAT GROUP search chinkee tan, and VISIONCHINKEE on You Tube for more news and encouragements.