It’s always a new chance for you to be the best version of yourself. That means becoming a more financially stable person this time around. If you’re looking to hoard away some money this year and not blow it all on stupid sh*t and drinking, I have some pointers for you.
Behold, the five best personal finance habits you could possibly start in your twenties. Thank me later when you’ve got a few grand in the bank.
1. Start a budget, and don’t go over it.
One of the best habits you can get into is creating a budget based on your income and how much you want to put away in savings, as well as other financial commitments you have. If you know you have a $300 car payment and $800 rent payment each month, and want to put $500 away in savings out of a total of $2,000 per month, you know you can’t go over $400 per month when it comes to everything else including groceries, medical bills, and going out.
2. Pay your credit cards off each month.
This is crucial. If you can’t manage your credit cards properly and keep finding yourself running them up without a way to pay them, get them paid off and then cancel them. This means you have no business having them. Which is fine, just realize it. Credit cards are not necessarily all that great for people who like to spend. If you do have credit cards, make sure to pay them off monthly or else you’ll suffer from high-interest rates and debt.
3. Open a 401(k).
Sounds like it’s only a thing for old people, I know. WTF are you doing worrying about the money you’ll have saved when you’re 60 or 70? You need to have money for when you’re older and unable/not willing to work, and this stash will have you covered. It’s never too early to start saving, even if you just start with a small amount. Many companies offer 401(k) plans where they will match a percentage of what you put aside. Who can say no to free money?
4. Don’t try and “keep up with the Joneses.”
Don’t compare yourself to your friends. You might be able to afford a Honda Civic while they drive an Audi, but that’s A-okay. Maybe you can’t afford that designer blouse, but hell, you found at for a fraction of the cost at TJ Maxx. Don’t let others keep you from saving money, and never feel pressured to be just like them. Live in a way that makes you feel comfortable financially, or else you can fall into trouble.
5. Keep track of your credit score.
Credit scores are based on a number of things, such as credit history, how much debt you owe, and you track record of paying off credit cards. If the score is low, there are things you can do to get it back up. You’ll want a good score when you go to apply for loans, rent an apartment, or buy a house.
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