How to be Financially Fit in your 20s
It's always better to start early when you're building good foundations for your financial future. Check out our 5 tips to help you shape up good finance habits that will help you level up your financial fitness and achieve your personal goals in your 20’s.
The best way to set yourself up for a great quality of life is by getting financially fit as early as you can.
Even if you’re just starting out with your financial journey, there are plenty of things you can do to get further along at a faster pace.
Here are 5 money tips that can set you on the right path:
1. Set a game plan for your goals
You may not have specific goals in mind yet, but don’t worry—you don’t need to have everything figured out yet. You can start with something as simple as answering these questions to help you figure out your general life goals:
• What are your aspirations in life?
• Are there things you want to achieve, or opportunities you want to be ready for?
• What are your goals in the next few years? What about for the longer term, like in 5 or 10 years?
Even if your answers for these are tentative at this point, listing your possible goals will always help you figure out your next steps. By knowing what your end goals are, you have a guide to plan backwards and figure out what you’ll need to do today to better your chances of getting what you want in the future.
2. Know and understand how you spend and save money
The best way to start your journey to financial fitness is by always being aware of your relationship with money.
Are you a thrifty person who’s already careful about spending? Or do you feel you still need to put in the effort to be more disciplined about how you use your money?
Being honest about your current financial habits will help you figure out your next steps to financial fitness. If you’re already saving up regularly and monitoring your money inflows, then maybe you can go on to other steps such as figuring out how to grow your savings.
On the other hand, if you’re at the earlier stage of building healthy financial habits, one thing you can do is start tracking your income and your expenses. This way you’ll have a clearer picture of what your current financial priorities are, so you can shift them accordingly if you feel like your priorities aren’t in the right order.
You can also consider setting a budget—it won’t always be easy to follow, but just having the budget as a goal will help you better control your spending.
3. Be prepared for emergencies
Emergencies can set you behind even if you’re careful about money, so the best thing you can do for your financial future is to assume the possibility of emergencies and prepare for them in advance.
Be ready for unexpected financial curveballs like accidents, getting sick, or losing a job by building an emergency fund. You can set a certain peso amount or a percent of your income to go into this fund every month, and build it over time. Take advantage of auto-bank transfers to make sure that you’re always adding to your fund so that IF an emergency happens, you won’t be completely unprepared.
4. Save and invest as early and as regularly as possible
It’s not enough to be careful about spending—if you want to be financially fit enough to have a great quality of life, you need to start saving and investing as early as possible.
Take advantage of your age—when you start investing early, that means you can reach your financial and life goals earlier as well. The good news is that today, this is already easy to do because all the information you need is a Google search away. Plus, investing has also gotten more affordable over the last few years. You usually only need PHP 1,000 to start investing and growing a portion of your savings.
5. Always push yourself to learn
Have mentors who can coach you with financial and investing knowledge. Access COL Financial’s free market tips and guidance when you:
• Subscribe to our Youtube channel
• Attend our free investing webinars
Financial fitness is an achievable goal, especially if you’re already thinking about it at an early age. The key is to create good money habits—begin with small steps, then exercise time, effort, and perseverance to make it a permanent routine and lifestyle. Try to also be consistent in applying them until they are just second nature for you to do.
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.