You’re only young once. What you do during your youth will have a direct impact on the quality of your future. While it’s okay to take the time to explore the world and find your identity, there are other things you should be using your endless wits and energy on. Your 20s and your 30s will fly by more quickly than you might expect, and opportunities will begin to narrow the older you get. Whether you like it or not, there comes a point when it’s more difficult to create a comfortable future for yourself.
This is why you’re never too young to start considering some of the biggest money matters that will shape your future. The earlier you plan, the better your chances of success.
Your Permanent Home
You won’t want to live the rest of your life worrying about next month’s rent. There are plenty of older adults who still struggle with the same problem, and while it’s unfair to generalize, there’s a huge chance that the majority of them didn’t prepare their finances to buy a house.
This investment isn’t only about having enough savings so you can choose among the best house and land packages. It’s also about establishing a good credit standing with your bank. This part is where it first goes wrong for many people because they don’t know how to handle bank loans and credit cards. Unless you’ll manage to save up enough money to pay in full, chances are you’ll need financial assistance. It’s unlikely you’ll be approved for one if you don’t take care of your credit standing today.
Your Retirement Plan
You’re just starting your career. Why plan for your retirement? The simple answer is that time is on your side right now. The longer you wait to save up for your retirement, the smaller your total savings will be. Starting early will also be lighter on your pocket because in order to achieve a total retirement fund of $500,000 by the time you’re in your sixties, you’ll only need to set aside $250 monthly if you’re in your 20s. Postpone saving until you’re 35 years old and you’ll need to save as much as $500 a month to achieve the same goal.
It’s also while you’re young that you’ll have the time and energy to take two or three jobs. Working hard to become financially stable may be difficult now, but imagine trying to make ends meet when you’re beyond the average hiring age.
Your Fallback Career
The COVID-19 pandemic is proof that industries can collapse overnight, and even the most successful businesses can go bankrupt in a matter of months. There’s no telling when the next global crisis will hit your employer hard and you’ll find yourself among those being offered severance pay.
A fallback career starts with an activity that has an earning capacity. Consider what your other skill sets are that you can profit from and invest in them. Is it drawing portraits? Baking pastries? Writing books? Invest in these skills until you’re confident in your ability to deliver quality goods and services. Your current career doesn’t have to fail for you to start a small business or to accept freelance work. Having more than one source of income is always a good idea. When things get tough, you might find that this is the investment that will keep you afloat.
You can still live in the moment while being financially responsible, especially when it comes to your future. If you refuse to waste today on impulse shopping and thoughtless pursuits, you’ll find yourself better equipped to enjoy life well into old age.