Discover the fundamentals of investing and gain the knowledge to make informed investment decisions.
In Your 20s: Laying the Foundation
Your 20s are all about setting the groundwork for your financial future. It’s the perfect time to start saving, even if you’re just beginning to earn a steady income. Here’s how to get started
Set up automatic transfers from your checking account to a savings account as soon as you receive your paycheck. Even small, consistent contributions add up over time. Aim to save at least 10-15% of your income.
Build an Emergency Fund
Life is unpredictable, and having an emergency fund is essential. Aim to save three to six months’ worth of living expenses in a high-yield savings account. This fund will protect you from unexpected expenses and prevent you from relying on credit.
Before you start budgeting, it's crucial to define your financial goals. Whether it's buying a home, saving for your child's education, or retiring comfortably, clear goals will guide your budgeting efforts.
To create an effective budget, you need to know your income and expenses. Use tools like spreadsheets or budgeting apps to keep track of every dollar coming in and going out.
Creating a Realistic Budget
Your budget should be a reflection of your financial reality. Be honest about your income and expenses, and create a budget that is sustainable over the long term.
Review your discretionary spending and look for areas where you can cut back. Small changes, like reducing dining out or canceling unused subscriptions, can add up over time.
An emergency fund is your safety net. Aim to save at least three to six months' worth of living expenses in case of unexpected events like medical bills or job loss.
