One of the best financial hacks you can apply in your life is to start saving money in your 20s. As you get older, responsibilities and expenses increase and you may no longer be in a position where you can save as much. This is why experts advise you not to put it off.
Start saving today, when time and the opportunity to grow your money with interest are on your side. Here are a few ways that you can get started, without making too many big changes.
1. Create a monthly budget
Putting together a monthly budget is easier now than ever before. There are some excellent apps that you can download which can help you track your income and your spending, and keep a record of it all in one place. Once you know what should be left after all your expenses have been allocated, it is possible to figure out an appropriate amount to put into savings each month.
2. Set up a savings account you can’t access too easily
In your 20s, you should be free of most of the large financial responsibilities that come later in life, such as a bond or children. With a budget in place, you may be surprised at how much you can squeeze out of your monthly income. Set up a savings account into which you can automatically deposit money every month. If you create a debit order, the money can go off before you even realise it’s gone, creating a habit that will set you up for the rest of your life.
3. Try a cash-only month to keep track of how quickly you spend
It’s harder to part with your hard-earned cash than it is to just swipe or tap your card. Physical money in your wallet is a constant, visual reminder of how much you have and how quickly you are spending. Try drawing cash at the beginning of the month and dividing it into categories – groceries, entertainment, etc – and putting each amount in a separate envelope. That way you are more aware of how much you have left to get you through to payday, and you will make wiser decisions when it comes to unnecessary spending. Keep the envelopes at home in a safe place and only take what you think you will need when you need it.
4. Start a side hustle. Get creative and save the earnings
These days everyone can benefit from having a side hustle, and what better time to start than when you are in your 20s? It not only boosts your income, but increases your career opportunities too. Identify your skills and areas of interest, and check out the competition in your area, or online. Whether it’s being a driver or freelancer, or making and selling your own products, it’s never been easier to promote your business than in this era of platforms such as Instagram and Twitter. You will also get genuine, instant feedback from potential customers.
5. Boost monthly retirement contributions while time is on your side
Don’t yawn! There will never be a better time to start saving up for your retirement than right now. The money you put aside in your 20s will grow considerably over the years and increase your chances of retiring comfortably – providing you with the chance to live the life you want. There’s nothing boring about that! Keep an eye on your retirement fund and watch it grow. The fact that those who start early need to put less money away over time than those who start later will motivate you to keep at it.
The information contained in this article is for information purposes only and does not constitute professional advice.
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