While your twenties could be a relatively care-free time in your life, they are also a great starting point for working towards financial security
There are a lot of great things that happen to you in your twenties: You get out of college, get your first apartment, and hopefully, your first steady paycheck. All of a sudden, you feel like a grownup and your life is in that amazing period between the kid you were and the adult you’re becoming. You are now responsible to your own fate and you should try and make the most of it. We’ve gathered five tips that will make sure you can be prepared for the future:
1 – Pay off your loans
It is not uncommon to have some form of debt in your twenties. In the U.S. alone, roughly 70% of all students finish their degree in debt. When paying off debt, while choosing the minimum payment may seem like the smartest choice, you might want to consider covering a little more every month, reducing the length of your loan and becoming debt-free before you reach a period in life where expenses are higher. Waking up one morning and realizing that you don’t owe anyone anything is an amazing feeling – when all of a sudden you have some extra cash to spend, or even better, invest.
2 – Start setting money aside
Yeah, you’re young and now is the time to enjoy life – but that doesn’t mean you need to spend every penny you earn. You’d be surprised at how easy it is to save a small amount every month, which will add up over the years and give you a great boost when you want to make an investment or buy a house.
People who start saving sooner will have more options and a higher sense of security when they grow older, so consider starting to set money aside today.
3 – Learn about investing
If you’re one of the lucky ones, you have some available cash, and you want to put it to good use. Start looking for good ways to invest your money (hint: The bank is rarely your best option). Some investments, such as real-estate, require significant startup capital, so they might not be the best option when you’re only starting out with investing. However, there are a lot of investment options, both high-risk and low-risk, in the stock market, and they don’t require a lot of cash to start. There also some very easy-to-use trading platforms, which put you in the middle of the action quickly. Stay updated with recent news and trends in the global market and try to make educated decisions when choosing which stock to buy.
4 – Set a long-term goal
The one thing all successful people have in common is that they set achievable goals and meet them. Don’t go too big, “owning a house by the time you’re 30” could seem so far away that subconsciously you might think it’s not realistic – and you won’t really work towards it. Try setting a realistic goal, or breaking up a big goal into small ones, such as saving $10,000 over two or three years.
And here’s a tip you probably haven’t thought about: Don’t tell your goals to anyone. Our brain reacts to positive feedback we get for declaring a goal the same way it reacts to feedback we get for achieving it, thus diminishing motivation. Keep your goals a secret and you’ll be more driven.
5 – Copy someone who knows
Being a good investor takes years of practice. While some people just have a knack for stocks, most successful traders have spent numerous hours studying trends, reading financial news, and listening to analysts’ predictions. Our online trading platform ,eToro, offers the copy trading option, which enables you to automatically copy its Top Traders and invest the same way they do. That way you can gain directly from their experience. This is a great tool for people who want to participate in the trading scene without spending hours-on-end in front of a screen, while choosing their own level of risk, and watching their money work for them, without the anxiety that comes from deciding what to buy and what to sell, and when.