Securing Your Financial Future in Your 20s
COL Investing Advocate
One of the most challenging parts of adulting is learning how to manage your finances, as early as possible. To help you get started the right way, here are five things to do to build your wealth and secure your financial future.
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.
This article is part of Your Investing Journey - COL's monthly email newsletter that contains insights and strategies by the COL community to help you achieve your financial goals. Click here to read more articles like this.
COL Financial is the country’s most trusted wealth-building partner where more than 400,000 Filipinos invest in stocks and mutual funds. COL was founded on the belief that ’every Filipino deserves to be rich’. That is why, for twenty years now, we remain committed to help Filipinos build wealth by continuously providing free seminars, expert guidance and innovate tools.