It’s no secret that finances have been rough for many people in the past couple of years, but perhaps no group has been more affected than the 20-somethings. Students who graduated from college in 2013 had an average of $28,000 in student loan debt. Coupled with a tough job market and increasing credit card debt, more and more 20-29-year olds in the United States find themselves in tough financial situations.
However, there are ways to break the cycle and live successfully in post-college life. What follows are “financial commandments” for your 20s, borrowed from financial resource Kiplinger.com. They can help you live a happier life without the stress of debt hanging over you.
Invest in yourself- your best asset for success is yourself, and your twenties are the best time to learn the job skills you need to market yourself to earn a better living. You have to increase your earning power now to help achieve your financial goals.
Plan ahead- think about the short term (less than five years), medium term (5-10 years) and long term (20+ years); where do you want to be at these points? Planning and budgeting can help you achieve the goals you set for yourself.
Live within your means- it’s easier said than done. By learning how to borrow only when necessary (think things with lasting impact – education, a home, etc.) and spend smartly, you’ll save yourself thousands in the long run.
Create an obsession for saving- ten percent of every paycheck should go directly into your savings account. It goes a long way for peace of mind and financial security.
Get rid of credit card debt- make it a goal to have eliminated credit card debt by the time you turn 30.
Start saving for the long term- we’re talking IRAs or 401(k)s. The sooner you start putting money into an account every month, the quicker that money will grow with compound interest.
Cut the cord- if you have your own apartment and your paycheck, you need to be in charge of your finances. Doing it on your own is the only way you’ll learn to do it right and be self-sufficient.
What all of these commandments have in common is that you are taking a more hands-on approach to your financial life. Your 20s are a great time in your life for personal growth, and being financially independent and responsible is part of that.