Financial Focus In Your 20s – Part 3

You’ve got a budget, you’re saving something for an emergency and for the long term, and you’ve got a debt repayment plan that’ll see you out of the whole in a reasonable amount of time. See what you can do with a plan? Speaking of which, we come to…

4. Plan ahead. Getting through life without some goals is like driving through unknown territory without a map. While you may not know quite yet how you’d like your life to turn out, it makes sense to at least be thinking about it. Will you want to own your own car? A home? A tent to go camping? Will you want to do the job you’re doing now forever? What other things might you like to do in your life? Travel? Go skiing in the winter? Live abroad?

You can have anything you want in your life providing you’re prepared to work hard to get it. But knowing what “it” is, and figuring out how to get from here to there takes a plan.

Live your life with your eyes open. Know that just about everything you may want to do or have or see will require some financial resources.  Make a plan so that the money doesn’t get in the way of living the life you want.

5. Build your credit history. To get the lowest interest rates when it comes time to borrow for a good reason, you need to establish a solid credit history. If you don’t yet have a credit card, you may have to apply for a secured card to get into the credit card game. With a secured card, you make a deposit -- usually $500 to $1000 -- as collateral and you get a credit card with a limit that’s half what you put on deposit. After about one year of using the card responsibly, you can apply for a regular card and do away with the secured card.

When you get your credit card, make sure you never put anything on it you can’t afford to pay back in full come the end of the month. While credit card companies will settle for the minimum payment – they revel in morons who only pay the minimum because they make so much money off those dopes – you should not. As long as you repay the card in full every month, you’ll be using the credit card to your advantage, not to theirs.

6. Buy some insurance. Nobody, regardless of age, likes to talk about insurance except insurance salespeople. Most people feel that the whole thing is yucky: it’s expensive, confusing, and mostly about sickness and death. But the single best way to ensure you can get insurance when you need it, is to buy it when you don’t. The added benefit is that the earlier you buy your insurance – be it disability, illness or life insurance – the cheaper it will be.

If you work for a company that offers insurance benefits, don’t get complacent. If you change jobs down the road and have become uninsurable in the interim you won’t qualify for new insurance. Make sure you have a basic private policy to cover your butt.

Financial Focus In Your 20s – Part 4: the end!

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