What Financial Goals Should You Be Working Towards In Your 20s

A lot of people think, nowadays, that your 20s are too young to start thinking too seriously about your future. While it’s true that you might not want to tie yourself down to any single situation too much, however, that doesn’t mean that you should go through life without any notion of what you plan to do next. Here, we’re going to look at examples of financial goals that you can start working towards as early as your 20s, and how they can improve your life well beyond the decade.

Be organized

The first thing you should do is ensure that all of your key financial documents are in your possession and are as cleanly organized as they can be. That first step is especially important because the longer you leave things like your birth certificate and past tax stubs with your parents, the easier it can become to lose them over time. If your parents have any funds in your name, then it might be a good idea to talk about transferring them to you or to simply get an idea of what they are. Keep a file for all financial documents that you need, including end of year statements, tax return records, and so on.

Get top marks in your credit score

A lot of people make it to their early twenties before they start getting any real understanding of what their credit is, which is a huge shame since a lot of people can end up dipping into credit cards and overdrafts before then. As such, if you’ve knocked yours down a few digits, now might be the time to start building towards a perfect credit score again. Getting current with any existing debts, making sure that you’re automating payments for bills, and making smart use of your credit cards or overdraft can all help tremendously. This is crucial because it can then improve your credit to the degree that you can buy vehicles, apply for home loans, and even open the path to starting a business with a loan.

Paying off your existing debt

It might sound like the above tip and, indeed, it is a part of improving your credit score, but clearing your credit card debt and other non-essential debts is always a good step. A lot of people get stuck in a cycle of revolving debt early and find themselves consistently deep within their credit utilization rate. There isn’t strictly anything wrong with using credit cards for purchases and, indeed, it can help improve your credit rating. However, before those planned purchases, you should aim to get entirely free of credit card debt. It’s an achievement that few people who use credit cards make in their twenties, and it shows excellent control over your finances that you will take with you beyond.

Build some financial protection

Before you look at what you should be saving towards, it’s a good idea to keep in mind that you should have some protection for your financial goals, as well. It’s all well and good to save towards certain objectives, but if a sudden emergency bill comes and wipes those savings out, then you can be left practically back at square one. Right now, the most commonly suggested kind of protection is to build yourself an emergency fund. Most suggest having an emergency fund that is enough to sustain your for a few months in the case of job loss, but that’s not always the most reasonable goal, so you need to set your own goals based on likely needs.

Getting on the property ladder

All too often, buying a house is associated with tying yourself down to one location for decades, which can make it seem like a pretty daunting ask for someone who is still active and moving in their career. However, that doesn’t have to be the case, at all. Getting into property early can if done well, simply make it easier to sell and buy houses in the future. With the help of homeowner loans, you can get a valuable asset at your disposal, allowing your more financial freedom. It can also serve as a level of security. The more real assets you have, the better protected you are against debt.

Preparing for retirement

There is no such thing as “too early” when it comes to putting savings towards your retirement. We are all going to need to retire someday, after all, and the sooner you start putting money towards that retirement, the easier it will be to reach the goals of how much you should be setting aside. Whether you are looking at luxury 55+ communities in Utah County, paying off your mortgage, or treating the grandchildren, it is important to make the most of your retirement money and plan your expenses ahead. If you have a set figure on how much you would like to have during your retirement, then giving yourself longer to reach that figure will keep your contributions smaller. Furthermore, you will have compounding interest on your side as well, meaning that your retirement savings are likely to be even better than you expected by the time that you actually need them. There are plenty of retirement savings goals you can find to help you determine how much you need and how much you should be putting away.

Getting into investing

If it’s not too early to start thinking about retirement, then it’s definitely not too early to start thinking about investing, as well. In fact, your investment options can be part of your retirement planning. Investment needs to be considered a different beast than simply saving, as there is risk associated with it. You can lose money as easily as you gain but, over the long-term, you stand to gain a lot more if you start investing early and often. There are low-cost investment options that can help you get a foot in the door even when you’re not making enough to start playing the stock markets, too.

It’s never too early to start building towards a healthy, wealthy financial future. You just need to put the right goals in your sight and know what actions to take to start reaching those goals.

Isa Lillo


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