Your twenties are a great time financially. You’ve finished college or worked out what you want to do or what business you want to go into. You get your first real job earning decent money. For most people, the beginning of your twenties have very little (or no) financial responsibility. You don’t have kids or a mortgage yet, and you are lucky to have a high disposable income.
Financially, you have got it made in your twenties. Here are a handful of things that you should know about money in your twenties so that you can come out of the decade of change with.. well, some change:
1. Compound Interest is Key
Your money can and will work for you, if you let it. Instead of spending all of your extra cash on dinners out or new clothes, there is NO better time than in your 20s to invest your money.
Interest will compound and make you more over the long run, and when you are young, time is on your side. The earlier you invest, the better off you will be financially in the long run, largely due to compounding interest.
2. Debt is a Waste
You may feel that debt is expected, and even normal for your generation, and you’d be right. But normal or average is not always good, and if you dig yourself into debt right now, you’ll more than likely regret it later.
Debt is a horrible money suck, and it comes fraught with all sorts of emotional and mental challenges, as well. Stay out of debt to ensure you have a secure future and you’ll be far ahead of your peers that don’t take this advice.
3. You can Afford to be Risky
When you are young and have more time to make money back and/or earn interest, you can afford to take a few risks with your cash. Invest your money, start a business, do something with your money that holds a lot of risk because with risk comes reward and you won’t feel as free to do this when you are older and have more responsibility and less time.