![]() You can check off that list much sooner by making it a routine to save a little bit every month. Budgets make it easier to pay off your debt without putting stress on your paycheck. Get rid of that looming debt anxiety for good. Like that sweet trip to Spain you’ve been thinking about. Tracking your spending helps identify areas for improvement so that you can spend less on things you don’t need and put that money towards something better. With a spending plan, you’d be surprised at how much you can squeeze out of your income. Your twenties are the best time to do the things you want to do when you’re still young and free of major responsibilities. It’s also important to learn how to stick to a budget so that you’ll be set for when your finances become a little more complicated. Starting to save earlier means giving yourself a smaller financial burden when that time comes. You may not be thinking about diapers and homeownership, but you might later on. Budgeting prepares you for future “adulting”Ĭaptain Obvious quote of the day: don’t start saving for a home at the exact time you want to buy a home. ![]() The key is to give your money time to maximize interest. Those eight measly years that Bill had on George helped him earn a whopping $135,580.76 more. When George turns 65, his investment is only worth $228,365.23. Let’s compare this to George, who follows the same investment plan, but starts at 30 years old. He continues investing $200 every month and by the time he turns 65 years old, his investment earns him $363,945.99. ![]() Here’s a simple exampleĪt 22 years old, Bill invests $200 into a mutual fund that offers a 5% return. The more time you let your investment grow, the more you squeeze out of each dollar. Here’s the idea: when you invest your money early, you don’t just earn interest on that investment, but over time you also earn interest on your interest. ![]() This is because of a little something called compound interest. The earlier you start saving, the more you’ll earn later on. It doesn’t matter how big or small your paycheck is. Why you should start budgeting in your 20s Saving early means earning more out of every dollar ![]()
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