4 Pillars needed to create a strong foundation for your financial future in your 20s
It's Youth Month and your 20s mark an exciting and carefree time in your life as you start a career, open accounts and buy your first house or car. It is important to remember, however, that this is also the best time to start planning for your future financial well-being.
Michael Kirkpatrick, Alexander Forbes Research & Product Development Retail best-practice specialist, has advice on how youth can develop the best financial plan to suit their needs, now and in the years to come.
There are four pillars needed to create a strong foundation for your financial future: getting out of debt, not getting caught in the ‘flash’ trap, protecting yourself financially, and setting goals.
- Getting out of debt
In as much as you need to build a good credit rating, it is important to note that you need to get out of debt to build your financial future. It is all fine to have credit but you still need to use it responsibly. It is about having access to credit and paying it off in the required time. The worst that can happen is while building a good credit record, you stop paying for your debt or paying it on time. Do not be scared of credit; rather it is about building a healthy relationship with your money and budget wisely.
- Don’t get caught in the ‘flash’ trap
- Protecting yourself financially
- Setting goals
Finally, here are money mistakes to avoid in your 20s:
- Taking too much debt and ignoring to pay it
- Not having a budget, over-spending or failing to stick to your budget
- Living without health cover, insurance and income protection
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