Soon enough you will be celebrating your 20th birthday and saying goodbye to the teenage years. Are you ready??
If your answer to this question is NO, perhaps this has something to do with the fact that you are not ready to take on some of the more adult responsibilities that come with entering this next chapter of your life.
One major milestone you will encounter as you move closer to adulthood is of course the added responsibility of managing your own financial affairs. Managing your finances will require that a variety of methods and steps take place in order to be successful in this area.
When it comes to your financial future, one step you should absolutely take is to be sure to start saving some money. While there are a variety of ways you can go about saving, you will want to start by setting a goal for how much you will save as well as the timeframe for when you want to have this amount saved by.
If your goal is to save money by the time you turn 20, next is to come up with some concrete methods of how you will go about saving.
Here are 4 ways to save before your 20th birthday.
1) Find a Part-Time Job
At this stage of your life, you may still be attending school. Fortunately there are many opportunities for part-time work that can coincide with your studies. Finding a part-time job is an ideal method of resolving the issue of where the money will come from.
In addition to working part-time at a specific workplace, you can also seek out online work that might also allow you to earn some extra income.
By the time your 20th birthday rolls around, you could already be on your way to saving a significant amount of money.
2) Manage Spending (Budget)
Another important part of managing your finances also has to do with monitoring your spending. Creating a budget can be a good method of keeping track of how much money you have coming in, how much you are spending each month, as well as where you are spending it.
While you do have to spend some of the money you are earning, by managing your spending you are more likely to only spend what you can afford to and still continue to save a sufficient portion of this income at the same time.
In order to effectively budget your money, there are many apps and budgeting software options to help you achieve this goal. These days, budgeting can be done with even more ease, as it can be done anywhere, as well as at at any time – even from the convenience of your smart phone.
3) Put Away Some Money in Savings
While the last tip will help you monitor how much you are saving as well as how much you can realistically afford to spend, here is where you look at specifically how much you are saving each month or with each pay cheque you receive.
Here you will also ask yourself, how much do I want to save by the time I turn 20? Once you have a a set amount in mind, you will also look at the timeframe you are left with.
Do you turn 20 in 6 months, 1 year, 2 years? Depending on your timeline, calculate how much you will need to save each month in order to reach your goal. For example, do you want to save $1500 in one year? If so, then divide this amount by 12 months and this will equal 125. This of course translates into having to save at least $125 each month to reach your goal.
You can even set up automated transfers of $125 each month and this will enable you to stay on track with your saving. This money will be transferred directly from your chequing to your savings account without having to lift a finger.
4) Avoid Signing up for Credit
Finally, one aspect of your financial management plan that you will want be very aware of, pertains to the area of credit.
It is important to be cautious when it comes to taking out too much credit too soon as this can negatively affect your finances before you even realize it. In fact, since you are just starting to really get your bearings when it comes to managing your finances, perhaps it is best not to sign up for credit at all.
By taking out credit now, you will definitely also derail your goals of saving money. If in addition to saving and spending a little each month, by including credit payments into the mix too, you are sure to be left with very minimal savings, even risking going into debt before you have had a chance to even really save.
At this point in time, it is highly recommended that you continue to save as much money as you can and hold off on applying for a credit card, for example until you have secured a steady income.
By implementing a savings plan now, not only are you showing what a responsible adult you are becoming, you are also laying the foundation for a very successful financial future. Now you can welcome your 20s with a celebration . . . and a financial peace of mind.