Securing Your Financial Future in Your 20s

Aside from learning how to be independent, the most challenging part of adulting is learning how to manage your finances. We cannot stress enough how important it is to get your finances together as early as now.

To help you start, we’ve listed 5 tips to financially secure your future:

1. Decide what you want your ideal life to be

Take the time to think about what your life goals are. Establishing your goals is the first step to securing your future since these will help you prioritize where your finances will go. It helps a lot if you categorize them into short-, medium-, and long-term goals so it’s easy to determine your priorities.

2. Review the money that comes in and out

Having a budget can help you big time in achieving your financial goals. Make sure to write everything down. From there, you’ll be able to determine which are needs and which are just wants. It helps also if you use a simple spreadsheet or budgeting apps like Mint or Honeydue. By taking the time to learn how to budget and manage your money, you can build habits that will set you up for financial success in the long run.

3. Build your rainy-day fund

A rainy-day fund aka emergency fund is a portion of your savings set aside to get you through life’s little surprises—like getting sick or losing a job. We recommend setting aside at least 5% (or more) of your monthly paycheck for your rainy-day fund. Try automating the process by setting up a scheduled bank transfer from your payroll to a separate account. This way, you won’t be tempted to use it for other things.

4. Actively seek guidance on financial matters

Money habits don’t develop overnight—you need time, effort, and of course proper guidance. You can start by watching credible video resources online or attending financial literacy webinars. Here at COL, we offer free webinars on stocks and mutual funds investing. Check out our YouTube channel (youtube.com/COLFinancial) for investing tips and more.

5. Grow yourself and your money ASAP

Never stop looking for ways to improve yourself and monetize your capabilities. Turn your skills into a healthy side income, and make your extra money work for you. The sooner you start investing, the more time you have to grow your money for your future. Capitalize on the power of compounding.

Yes, adulting can be hard, but it doesn’t have to be when it comes to managing your finances. You don’t have to have it all figured out now. Start slowly with baby steps and follow the tips we listed above. And sooner rather than later, you’ll start to see your finances growing and start fulfilling those goals.