Financial advice for 20 somethings is everywhere, it seems. You cannot turn on the television or read a news site without hearing about how unfair the dice 20 somethings have rolled. Financial advice for 20 somethings now involves about as much talk about clearing up enormous debt loads as it does about saving for the good, big ticket items in life.
It is the truth, though, that part of financial advice for 20 somethings might involve clearing up "good" debt such as college education and the cost of a car loan that gets you to your job every day. It is not how much money or how much debt you have that defines you, though. It is how you decide to manage your money. Lucky for you, financial advice for 20 somethings, like children's financial advice also focuses mainly on money management, balance and also on time, which are all on your side still.
Do know that time seems to quicken as it passes. So, do what you can now to clear up good debts, bad debts so you can start saving for the future. Actually, financial advice for 20 somethings may involve more juggling and balancing acts than just focusing on one matter at a time. First off, good debt are loans that are meant to further your earning power. These include education loans and mortgages. That is the traditional definition, though some money experts go counter to that definition, claiming any debt is "bad".
Traditionally, "bad debt" is defined as unsecured credit, like credit cards. This is generally considered "bad" because it allows unfettered over-spending at an interest rate of any sort. So, you could get into a bad habit of buying groceries using a credit card, which may mean you are running a deficit and cannot afford, in truth.
A good plan for financial advice for 20 somethings may be to find a financial advisor who can help you understand money management better. And, you can explain your vision for your own financial future. It may be that you have a trust fund, and need help managing a new load of income that you have never seen before. It could be that you are under a heavy debt load between school loans and credit card debt. Or, you may just be wondering how to save up money while juggling monthly expenses.
A financial advisor can help you decide not only on your goals, but a fiscally responsible way to clear up all debts, so you have more money for investing into future use: 401k, Roth IRA contributions, parenthood. Retirement comes sooner than you think, and while you may or may not be able to funnel as much money as you like at the beginning, starting to think of it even as early as 20 somethings can help you compound your savings.
Compounding interest is what works for you. There will be ups and downs in the market, and you need time in order to harness the power of your money. This makes your money work for you. In addition, financial advice will likely include a prudent distribution of your money into rather diverse investment vehicles. It will likely not all fall into high risk, or high return stocks. Instead, you will want some of your money in bonds and other safer modes of saving.
Financial advice for 20 somethings involves housing to an extent too. There are some who cannot begin to fathom buying anything that costs even $100,000 (other than their education, perhaps.) But, there are still others who look forward to home ownership, valuing it as both their future financial nest egg and retirement account. It is interesting that real estate conjures up so many different states of mind and values from different 20 somethings.
Real estate is a lot like the other financial (read: stock) markets, though. Traditional advice is when the market is down, buy low. When the market is up, sell high. The reason you save your money works into this financial advice for 20 somethings too. It is so that when you sell high, you can afford to buy up. Saving allows you to take advantage of life's opportunities whether you are still 20 somethings seeking advice. Or, even 30 or 40 somethings, no longer 20.
Financial advice for 20 somethings can involve learning money management skills, learning to balance a budget, learning to identify actual income and expenses and the remainder. It can involve learning to save for the future, while having some money to enjoy the present. Advice for 20 somethings may be traditional, or just based on newer money advice gurus whose advice is to play the game differently than their parents did. Whatever you decide, play the game smartly more than anything else.
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