Your 20s are a crucial time to plan for your retirement or achieve financial freedom. Here’s how to start today.
Your 20s are an exciting phase of your life, as you transition into full-blown adulthood. On the flip side, you may also be juggling things such as student loans, navigating your way around credit and acquiring debt, or even helping out at home.
What’s more, with South African women’s life expectancy also likely to be higher than males according to 2018 World Health Organization data, starting to save as early as possible is crucial for women.
Here are a few tips to start saving today:
1. MAKE BUDGETING A WAY OF LIFE
Find it hard to stick to a budget? Luckily, we live in a digital world with a multitude of free budgeting apps at our fingertips. Visit your iOS App Store or Android Play Store and search ‘free budgeting app’ to find the right one for you.
2. CREATE MULTIPLE INCOME STREAMS
Supplement your main income with freelance work, or start a small business based on one of your skills or passions. Be sure to make each event you attend a networking opportunity.
3. PAY OFF LARGE DEBT ASAP
Learn to avoid accumulating interest early in the game by paying off debt as soon as possible.
4. SET UP AN AUTOMATED DEBIT ORDER
Budget for a certain amount to be automatically transferred into your savings account every month. Ask your bank for the best investment account that earns interest that meets your short- and long-term goals.
5. START INVESTING
It’s simple: considering the principles of compound interest, the sooner you start creating a nest egg, the more you’ll be able to accumulate over time.
6. CONSIDER WHAT YOU REALLY NEED VS WANT
Continue paying that gym membership, or take up jogging? Need to try every new restaurant in town, or have fun potlucks at home with your friends? Take time to reflect on your lifestyle and where you can cut costs.
7. AVOID CASHING OUT YOUR RETIREMENT SAVINGS
As tempting as it may be to dip into your retirement savings each time you switch jobs, you’ll continuously have to reinvest larger amounts to recoup what you’ve lost.
With these few simple yet powerful tips to start saving in your 20s, the key is always in setting up a plan and sticking to it.