It’s time to start making smart money moves in your 20s.
It’s a New Year, and that means it’s time to get your money stuff in order. Experts say that by the time February rolls around you will have already dropped most of your resolutions by the waste side.
It’s time to prove the experts wrong!
Here are 6 smart money moves in your 20s that will ignite your financial future, once and for all. They all work in tandem, so incorporate them all into your action plan for this year.
Whatever steps you take now will help you smooth sail your way into your 30’s. Keep these up year after year and you will be miles ahead of your friends that don’t think that managing their money is “important” to their future.
Bonus Money Move
Master your budget. Seriously! This is the smartest money move you can make in your 20’s to set yourself up for the future. Budgeting doesn’t have to be dull and boring…or scary.
Why is budgeting SO Important?
Your budget is your roadmap. It tells you where you are going and how you are going to get there. Your goals and your budget are as good of a combo as mac and cheese. Your goals give you direction and your budget gives your goals an action plan to meet them. If you can master your budget in your 20’s, you are going to sail through life way ahead of everyone else that is living paycheck-to-paycheck!
I’ve got a really simple, easy to follow, system to manage your budget in 20-Min a Month PLUS a FREE e-course to help you get all set up. Sign up below.
If you’re looking to make some serious changes in the New Year and FINALLY master your budget, sign up for my FREE e-course on How to Build a Better Budget, where I teach you all the tricks to budgeting and strategies to supercharge your savings.
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Let’s get to the list…
It’s a new year and now is the time to get your free annual credit report. Although you might not have a lot of debt, it’s important to check your credit annually and get in the habit of doing so. Not only will you be checking this one-off your list, but you will also learn first hand how your credit is reported, and get cozy with that all important three-digit number known as your credit score. This is one three-digit combination where the higher number wins.
- You’re looking for a 720+ credit score to get the very best interest rates on things like cars, credit cards and loans. If you don’t have a score that high, it’s time to start working on an action plan to raise it up. Good credit will save you THOUSANDS AND THOUSANDS of dollars over your lifetime.
You should always be getting something for the money you are spending. Points, cash back or discounts are the common form of “something back” with credit cards. Some great credit card suggestions are the Discover It card and the Chase Freedom card. Both offer rewards and cash back that you can use on all sorts of things. Here’s a smart money tip: you should put all your monthly expenses on the credit card and then pay it off each month. Not only will be scoring some major points, but you will also be building a better credit score. Interest is your worst nightmare, so never keep more of a balance than you can pay off. Let’s not make the credit card companies richer – let’s make you richer.
I never suggest stock market investing in your 20’s. It’s not like tossing the dice in Las Vegas on a craps game. You need to learn the foundation elements first. Practice makes “perfect” in the game of investing. A cool company called Sprinklebit offers an extensive FREE online Investment University and $5,000 free Sprinklebucks to mock invest. See whether you have the stomach to handle investment gains and losses before you play in the big leagues.
- You don’t need to pay a financial planner to invest your money either in retirement accounts. With companies like Betterment and Wealthfront, you can create a diversified portfolio for a fraction of the price. I’m talking dollars a month to create a portfolio that would cost you hundreds, if not thousands elsewhere. The best part is these are both online companies built for millennials.
Say bye-bye to miserably low brick and mortar savings interest rates and say hello to high-yield savings accounts. This one is a no-brainer. If you earn .01% interest with your traditional bank savings account, but can earn 1.00% interest with an online bank, wouldn’t you make the switch right away? Your motto for life needs to be – save, save, save – and save with a reliable bank that is going to offer you the best interest rate possible. The best places to look are Ally Bank and Capital One 360.
Student Loan Refinance:
Student loan payments are the worst, and rates are all over the place. There are so many options now for refinancing your student loans, and even government programs like the student loan forgiveness program. SoFi is a leader in alternative student loan refinancing and offers great rates and options for students. They even have an entrepreneur program geared towards those biz lovers who are starting their own business. Make sure you do your research before you refinance and know what your options are. The best way to score the best deal goes back to point #1 – have a solid credit score and the world will reward you. See how full circle money is?
Student discounts don’t just apply to students, and they are everywhere you look – at restaurants, bookstores, even Apple offers student discount rates. For more of life’s necessities, you should get really familiar with your college credit union. As alumni you can often times have access to the credit union for life. Here you can save money on car insurance, bank accounts, loans, and even health insurance, not to mention travel and all sorts of perks.