Your 20s is an important stage in your life. This is when you’re supposed to work hard and build your career so in your 30s, you can enjoy a bit of stability.
While that should definitely be the case, it’s not always easy to save during your 20s. That’s because the likelihood is you’ll have the burden of your student debt, rent, and other bills to contend with as you’re starting out.
The usual tip that experts give to people is that in order to save for the future, at least 20% should be set aside for savings. While that may work for some people, if you’re wasteful and do not know how to budget the chances of you saving money is slim.
Here are financial rules to live by that are apt for millennials in this day and age.
Don’t be afraid to make money from what you love doing
Your degree will certainly be able to help you get a job. However, the skills you acquire from doing the things you love in your spare time could potentially help you earn money on the side.
Hobbies can turn out to be viable financial endeavors. Take for example this article from The Gazette, which discussed the success story of a remote-control vehicle enthusiast who turned his hobby into a profitable business. Now he is the owner of a 2,800-square-foot unit that specializes in selling all kinds of remote-controlled vehicles such as cars, planes, drones, and quadcopters.
Other entrepreneurs have made side projects such as creating handicrafts and selling them online through Etsy because it is a manageable second job that allows you to work whenever you have free time. Additionally, if you’re a musician, providing tutoring for people has become a great way to earn extra cash after your 9-5. These are just some of the ways people utilize their skillset to earn an additional salary to help them achieve their long-term financial goals.
Only spend on necessities
Sometimes, the line between what you actually need and items that can be considered luxuries can become blurred. Millennials have to learn that impulse buying can impact their savings and kickstart bad financial habits that will hurt them later in life.
According to billionaire Mark Cuban in his book “How to Win at the Sport of Business,” he said that if you’re in your 20s, you should live cheaply even if you happen to be doing well. The key takeaway here is that if you live cheaply, there will be more options available to you in terms of where you can start investing.
Invest in yourself and your future
Investing in your 20s is way cheaper than when you reach your 30s. When you reach your 30s, inflation will devalue your possessions, and you’d wish you invested when you were still starting your professional career.
If you invest a significant amount of money by the age of 22, you could end up with about $1 million or more for retirement than if you were to start at 30. Because of the effect of compounding returns, your money will grow quicker the sooner you put it in an investment account.
When you invest, you may want to consider dealing in FOREX. In an article by FXCM, it was revealed that Brazil, Russia, India, China, and South Africa are considered the top emerging markets. Currencies move, and they can be sold easily since they’re used in everyday trade, which is why plenty of investors opt to invest in foreign currencies.
As of 2015, the aforementioned countries have the following global rank in GDP in terms of purchasing power parity:
Brazil: 7th (US$3.1 trillion)
Russia: 6th (US$3.5 trillion)
India: 3rd (US$7.9 trillion)
China: 1st (US$19.5 trillion)
South Africa: 28th (US$723 billion)
If you’re also putting money into your 401(k) in your 20s, you’re certainly on the right track.
Invest in yourself, lessen impulse purchases, and make some money from what you love doing the most outside of your normal working environment. Follow these three tips and, the chances are, you’ll enjoy living life more in your 30s.