3 Smart Money Tips to Follow in Your Early 20s
It is often said that early 20s are the heyday of our life. Every solid action that you take in your early 20s significantly affects your future. In this blog, we will discuss 3 simple and smart tips that you should follow in your early 20s to save money and strengthen your financial future.
Create a Budget and Conform to it
Creating a budget sounds like a daunting task but it is worth your time. It will help you keep track of the amount of money streaking in and out of your bank account on a monthly basis. There are many apps and online resources to help you create your budget. Once the format is ready, you can customise it according to your revised salary and spending pattern.
There is no use of creating a budget if you don’t stick to it. A budget is a reflection of your financial goals. Therefore, regular checking of your budget is a way to figure out whether or not your spending crosses the threshold of your income.
If your spouse also shares monthly expenses, ensure that both have easy access to the budget sheet.
Build an impressive credit history
Creating a good credit history is important to qualify for all types of financial products including loans and credit cards. Moreover, the higher your credit score, the better the terms! This means, with a good credit score, you can save a significant amount of money in the long run.
To build a good credit score, you must avoid being a defaulter. Make sure to pay instalments on time.
One of the big hurdles in creating a good credit score is you should have some impressive credit history to be considered eligible for a credit card. There is a way to overcome the hurdle if any of your friends or a family member allows you to become an authorised user on his/her credit card.
Also think about applying for a secured card that is similar to a credit card but requires you to put down a deposit.
Establish an emergency fund
One of the best financial decisions that you can take in your early 20s is setting up an emergency fund so that you can never run out of money to manage unexpected expenses without begging for someone’s help.
When it comes to building an emergency fund, keep money in a high-yielding savings account so that you can resist the temptation of taking out money for impulsive spending.
