7 SECRET THINGS TO KNOW ABOUT FINANCES IN YOUR 20’S.

The smartest thing to do if you’re in your twenties is to be financially literate. The earlier you
learn about the rules of money, the better for you and your future. Regardless of your gender,
your 20’s is all about finding balance in every aspect of your life—like emotionally, socially,
career wise, family. The list is somewhat endless but one of the most important aspects is
finding financial balance. Most of the time, we don’t see the importance of being financially
buoyant until we get to our thirties, which will be a bit more difficult because by then we will have
more responsibilities than we have in our twenties. So the earlier we start taking steps towards
our finances, the more enjoyable life becomes.

Here are the secret things to know about finances in your 20’s.

1 . Learn and master the habit of budgeting
The good thing here is that budgeting is a skill that nobody is born with, but anyone can learn it
and even master it. It is a lifelong skill that will help you manage your finances, you can start by
tracking your cash flow. Start by taking note of the money that goes out and the one that comes
in, by doing that you will know if you are living within or above your means. Budgeting corrects
your spending if you are overspending and helps you save more intentionally. There are
different ways and methods to practice budgeting, you could use an app or the normal method
of writing in a book, whichever methods you may use ensure you prioritize the important things,
like basic human needs. Budgeting doesn’t mean you should not enjoy life, it actually helps you
make room for meaningful spending.

2. Cultivate the habit of saving
Just like budgeting, saving is a skill that nobody is born with but it is learnable and anyone can
learn it. It is very important to have a good saving habit, although saving is not always easy,
especially in one’s twenties but it is worth it in the end. Learning to save for the little things in
your will help you save for bigger things like a house or even a car. Having an emergency fund
is very important and it is something that you should prioritize. The mistake most people make is
spending before saving and at the end they end up saving a small amount of money or not even
saving at all. That is why it is important to save before spending. If you can automate your
savings, please do, that is you should have a savings account which the bank will automatically
transfer your savings too.

3. Clear your debts

mostly, the debts we normally have in our twenties are usually student
loans. It is important to clear these debts because the longer it stays the more interest you will
have to pay. That is why it is important to find areas where you can reduce your spending so as
to clear debts as soon as possible. Debts can hinder you from achieving your goals, especially
your financial goals. In fact, you can stop saving for a while so as to clear these debts, paying
off debts is saving too because you will be saving yourself from paying more interest. And if
you’re lucky enough not to have student loans to pay, then congratulations. It is now up to you to
avoid
going into debts. If you sense that you are spending more than you earn it is important you
correct it because that way, you will go into debts.

4. Invest in yourself

your twenties is the best time to invest in yourself. Investing in yourself is
more than getting an education, it means you are not wasting your energy and time on things
that don’t add value to your life. Take your time to invest in good relationships, including
friendship. Build good connections with people that will be helpful to you in the future. Also, you
invest in yourself by doing things that you will be proud of and will be useful to you in years to
come. For instance learning one or two skills is not a bad idea, reading books about your career
and financial management skills is another form of self investment.

5. Build good credits

having good credit is like paying off debts, it makes things easier. You can
always get a low rate of interest when you need to borrow money. You can have a good credit
score by paying your loan on time and also paying off your credit card balance every month.

6. Start saving for retirement

it might sound funny but it is a very smart thing to do. No matter
how little you start saving now, it will definitely add up especially when you are saving it in a
retirement account. It will grow exponentially due to compound interest. You can go to a bank to
seek more knowledge about retirement savings accounts or you can also ask a financial advisor
to put you through.

7. Plan towards owning your own home

rent is one of the major expenses many people pay. If
owning your own home is not part of your financial goal, then it is time you add it. It is not
compulsory for your first home to be your dream home. You need to start from somewhere. After
you might have settled your other financial goal like emergency funds and others that you may
have, then you can now start thinking of owning a home. Owning a home will not only make you
comfortable but will also relieve you of paying rent which would give you more time to achieve
your other goals.