Image Credits: pixabay.com (CC0 Public Domain)
For most people, 20s was the decade that defined who they became for the rest of their lives. It is the era of endless exploration and distinctive decision-making. Not to mention, it is the time that you establish your spending habits.
If you are in your 20s right now…take the time to invest in yourself, to learn about personal finance, and to get on the right track. Start by observing the healthy financial habits and diminishing the unhealthy financial habits.
THE DO’S
1. DO THIS FIRST OF ALL
The first step you must take is to establish a realistic and beneficial budget. Instead of perceiving it as something that limits your spending, perceive it as a tool that encourages you to live within your means.
Begin by listing down your expenses (i.e., fixed and variable), your income, and debts. Your cash flow for the previous weeks will help you setup your budget. Do not panic if you still have to pay your student loan because your budget will help you plan your income allocation.
2. DO EDUCATE YOURSELF
Read and understand materials about self-empowerment, investment, and money management. Here are four books to get you started with:
“The War of Art” by Steven Pressfield
“Why Stocks Go Up and Down” by William Pike
“The Intelligent Investor” by Benjamin Graham
“Turning Pro” by Steven Pressfield
3. DO PRACTICE COOKING
With the pervasive technology, it is possible to learn just about anything! If you want to save money on eating out (especially if you are living on your own), it is best to learn how to cook. Convince your 20-something self that it is about time to practice cooking simple meals such as Omelet, Carbonara, and Chicken Rice. Remember that aside from rent, your food expenses make the largest impact on your budget.
Image Credits: crateandbarrel.com
THE DON’TS
1. DO NOT SPEND TOO MUCH ON CIGARETTES
As you know, Singapore is one of the cities that sell expensive cigarettes. And if you are caught smoking one in a restricted place, you are bound to pay a hefty price of S$200-1,000. Aside from its high cost, you are at risk of paying costly health care fees (e.g.,due to lung cancer). So think twice before you light one!
2. DO NOT BOOST YOUR CREDIT CARD DEBT
Aside from splurging your money, another unhealthy habit that you have to stop is not paying off your credit card. The bad credit decisions you made in your 20s can haunt you in the future. For example, it can affect whether or not you are able to get a loan to buy a car.
3. DO NOT SPLURGE FOR “EXPERIENCES” ALONE
Millennials have shifted their spending patterns to experiences rather than material goods. However, if you solely spend your hard-earned cash to pay for your travel without the consideration of your savings, everything can go down hill. Saving money is important not only because emergencies happen but also because retirement is inevitable.
Image Credits: pixabay.com (CC0 Public Domain)
