Enjoy Your Early 20s While Not Being Broke

Your early 20s are a time of exploration, growth, and newfound financial independence. It’s a period filled with exciting opportunities to see more of what life has to offer, while establishing sound finances so you don’t sacrifice your future for your exploration era.

Striking a balance between enjoying life and building a secure financial future is essential. Here’s a simple guide to help you Enjoy your early 20s while not being broke for the future.

Keep saving the top priority

While it’s tempting to spend every peso, prioritizing regular savings is crucial for long-term financial stability. Aim to save at least 20 percent of your income. This might seem daunting especially when you have the money in your hands now and how easy it is to spend it, but even small amounts saved consistently can add up over time. Consider automating your savings to make it effortless.

Building an emergency fund should be another priority outside of your regular savings. Try saving at least 10 percent of your income for your emergency fund. As we have continuously stressed before, unexpected expenses can arise, and having an emergency fund to fall back on can prevent financial stress.

Your 20s are some of the best times in your life. Enjoy it.

Your 20s are the prime time for exploration and creating memories. It’s essential to allocate a portion of your income for experiences and wants. Whether it’s traveling, trying new hobbies, or enjoying social outings, these experiences enrich your life.

Aim for a 20 percent allocation for discretionary spending. However, it’s crucial to be mindful of impulse purchases and to prioritize experiences over material possessions. Creating a budget can help you track your spending and ensure you’re staying within your means.

The key with wants is to always stay within your means. Stay within your budget. Repeat these statements every time you decide to indulge yourself in a want.

Always mind your expenses and needs

Once your income arrives, it’s crucial to allocate funds efficiently. Prioritize essential expenses like rent, utilities, and groceries. Create a realistic budget and stick to it. Avoid unnecessary spending and focus on building a solid financial foundation.

After you’ve allocated for your expenses, pay your monthly debts immediately. You don’t want those high interest rates and late payment penalties creeping in from out of nowhere. Keeping your debts in check will do good for your credit score in the long run.

Balancing your desire for experiences with the need for financial security is key to enjoying your early 20s without compromising your future. By adopting a simple 30 percent for savings, 20 percent for wants, and 50 percent for monthly expenses budgeting approach you can create a solid financial foundation in your 20s while still being able to enjoy this crucial part of your life. By making conscious spending decisions, you’ll be well-prepared.

Work hard, play harder. Enjoy. (GFB)