On your 20s, you will encounter a myriad of firsts. From earning your first full-time job to surviving your first failure, your early experiences shape who you become in the future. Your major accomplishments and significant failures are your best teachers.
You will become more independent and responsible as time passed. You will begin to live on your own, to solve your own problems, and to budget your own finances. Hence, it is important to take the following money moves as early as now.
MONEY MOVES #1: MAKING QUALITY PURCHASES
Living in the modern generation where everything is handed with significant convenience, you can buy anything you want with a few taps or clicks. It is tempting to bite into every online promotions or group deals available. However, you need to survive these temptations to make good decisions.
Identify your financial goals and work towards it. You may succumb to your wants from time to time, but you are the only one who can recognize what is important. Invest on things that have a greater value in the future.
MONEY MOVES #2: CREATING A BUDGET
As a young adult, it may be your first time to dissociate yourself financially from your parents. Your independence comes with the responsibility to understand what comes in and what comes out from your pockets. You can either go the old-school route through journalling or the digital route through Excel or budgeting tools. Do whichever feels more comfortable to you. Leave some money for your unexpected and recreational expenses.
What if you are romantically involved with someone? With love and care comes the acts of service. You may choose to spend money for your beloved and that will open another expense category. It is up to you to allocate how much you want for your dating budget.
MONEY MOVES #3: SAVING AND INVESTING
Time is of the essence. There is no perfect time to save and invest than right now. Let your budget direct you to how much you can save each month. It is recommended to save at least one-third of your income. This way, you can cushion unexpected expenses brought by sudden life changes. Do not get me started about layoffs and home repairs!
As for investing, you may consider maximizing your contributions to your CPF account. You will reap what you sow.
MONEY MOVES #4: OPEN TWO BANK ACCOUNTS
As a responsible young adult, you may open two bank accounts. One account can handle your operations and the other can handle your reserves. By operations, I am referring to the money you will spend for your everyday needs. Money from your operational account can be used to pay for your bills and daily purchases.
While, the reserve account can be used to secure your savings. It is the account that can help you reach your financial goals.
When everything is said and done, you want to take advantage of the time you have now. Make smart choices as you will reap its benefits later in life. However, do not forget to live a little. You work for a reason – to a live a pleasant life. Do not forget to reward yourself for all the hard-work you have been