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3 Tips for Saving Money in Your 20s
Saving money in your 20s may seem like an impossible task, but did you know that your 20s is actually prime time to start setting money aside for you future?
If you’re wondering how to save money in your 20s, follow these three simple tips for managing your funds and setting yourself up for a financially successful future.
3 Important Money Saving Tips for Young Adults
1. Start an emergency fund. An emergency fund is one of the most important things you can establish in your twenties. Should you experience any financial hardships, such as unemployment, unexpected medical expenses, or an expensive car repair, your emergency fund will be there to cover you.
But how much money should you save? That depends on how much you spend each month. Money Under 30 suggests having at least three months of expenses saved up. You can use their Emergency Fund Calculator to get a better idea of how much you should be putting away.
2. Mange your budget. Take a close look at your budget—especially your entertainment budget—to see where you can cut back. Adults in their twenties often spend money on entertainment, like concerts with friends and weekend travel plans, and these areas are often where you can cut back the most.
The Penny Hoarder suggests taking charge in your group of friends and making sure your plans are reasonably priced.
3. Pay down your debt. Paying down your loans now will save you money in the future. Forbes recommends focusing on your emergency fund and retirement savings first, then paying off any debt with interest rates over 7%. For interest rates over 7%, you’re likely save more on interest than you would earn by investing that money. Always consult a financial advisor or debt expert before making decisions on consolidation or pay off.
Save Money with First Bank
Following these three simple money management tips is a great way to reach your savings goals. For more money management tips, check out First Bank’s Financial Education Center or contact us to learn more about our savings accounts.
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Sources:
Betterment: https://www.betterment.com/resources/investment-strategy/strategy-investing-in-your-20s/
Money Under 30: http://www.moneyunder30.com/emergency-fund-calculator
PennyHoarder: http://www.thepennyhoarder.com/managing-money-in-your-early-20s/
Forbes: http://www.forbes.com/sites/financialfinesse/2014/03/06/should-you-increase-savings-first-or-pay-down-debt/#7ae4e10b33e6