Once you are finally out of school and earning real money, on your own, there is so much to celebrate! And your newfound freedom and financial independence should be celebrated. However, it should also be guarded. So many young people are so excited about the here and now that they forget to plan for the future. Unfortunately, this is a mistake that could take decades to recover from. Many of the people who utilize the Freedom Debt Relief program are smart, savvy people, who made regrettable financial mistakes early on. To make sure that this doesn’t happen to you, here are the most common financial mistakes you really need to avoid.
#1: Failing to Set Financial Goals
Regardless of your age, you should always have financial goals. The sooner you start them, the better. If you set goals right away, in your 20s, with your first good-paying job, then you establish the right kind of financial discipline early on. Financial goal-setting and discipline is the foundation for all the other things we will talk about in this article. According to Freedom Debt Relief, once you get this right, it will be much easier to get the rest right. So, whether your goal is to stay out of debt, make a big purchase of a vehicle or home, or start to build your savings -if you have goals and you stick to them, you can make it happen.
#2: Not Putting Enough Money Aside
The one common thing that most older people will tell you is to begin saving your money early on in life. The sooner, the better. Sure, when you are young it may feel like you have the rest of your life ahead of you to save. But as you get older, you realize just how quickly time passes. And if you get into the habit of putting off your savings, it could be decades before you realize just how important it is! Freedom Debt Relief recommends that you start with your emergency savings fund. This should be built up to three to six months’ worth of daily living expenses. You should also begin saving for your retirement – yes, start in your 20s. Over time, with compounded interest, your retirement fund will grow exponentially compared to someone in their 40s saving the same amount of money. Time is on your side when you are young. Remember that.
#3: Establishing Good Credit
When you are in your 20s and finally fully independent, it is so tempting to spend money on various things – eating out with friends, grabbing drinks after work, taking a trip to somewhere you’ve always wanted to go, or even just decorating your new home. However, these things all cost money. And while that doesn’t mean you shouldn’t do them, it does mean that you need to watch your spending and make sure you can afford them. It can be tempting to run up the credit cards. However, this is a bad idea. Obtaining credit cards is good because they can help you to establish good credit – which you will need to buy a car, home, or other big expenditure.
Freedom Debt Relief recommends that you avoid charging more than you can pay off each month. Use your cards to your advantage to help build your credit, not harm it.
If you do find that you’ve already overspent on your credit cards, there is help. Freedom Debt Relief could help you eliminate your credit card debt for much less than you currently owe. They have over 400,000 clients and have resolved over $7 billion dollars in burdensome debt.
Want to learn more? Contact Freedom Debt Relief online for your free, no-risk debt evaluation.
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What financial mistakes have you made in life?