How to Create The Best Investment Plan in Your 20s
The early you start investing money, the better. This guide will teach you how to create the best investment plan possible while you’re still in your 20s.
Your twenties can be a confusing time. You’ve just graduated college, started your first job, and wonder “now what”?
Marriage, mortgages, and retirement seem like a long way away, but the best investment plan is one that starts as early as possible.
Follow these five tips to be on your way to a successful strategy and a secure future.
1. The Best Investment Plan Starts Early
In your twenties, time is your biggest asset. Thankfully for you, you have a lot of it.
You may not think $20-50 is enough to start a retirement fund, but that money accumulates over time.
The earlier you start your investment plan, the greater your savings will be in the future.
The earlier you start investing, the earlier you can retire!
2. Set Personal Finance Goals
If you have a tangible, realistic goal in mind, it is much easier to save money.
Retirement feels like a lifetime away for many young people, but if you set goals for your best investment plan now, you’ll be able to visualize and plan for the future you want.
Rather than picking an arbitrary age to retire, plan for a realistic amount of money to save by the time you want to retire.
This will turn saying no to expensive nights out with friends, impulse purchases, and other temptations saying yes to a secure future.
3. Pay Off Debt
The easiest way to minimize your debt is to stop adding to it. Stop relying on credit and stop spending money you don’t have.
Start paying off your debt from the smallest to largest debts.
For example, start with your overdue credit balance and move up to larger debts like student loans.
Paying off these small debts one at a time will give you a sense of accomplishment and keep you on track to be debt free.
If possible, ask your credit union or financial institution to lower your interest rates.
While they may decline your request, there is a good chance your bank will lower your interest rate if you ask.
4. Pick Up a Side Hustle
Make extra money to invest by dedicating some of your free time to making extra income.
Drive for a rideshare service like Uber or Lyft on the weekend to pick up some extra cash on the weekends or after hours.
Sign up for small job services like dog-walking, delivery, or babysitting to earn money on your time.
5. Take Advantage of Your 401(k)
If your employer offers a 401(k) plan, you are losing money by not investing in it.
A 401(k) allows you to start saving money for retirement by investing a portion of your paycheck into retirement funds. This may mean a smaller paycheck for now, but it ensures you start investing in your future earlier.
Some employers even offer 401(k) matching, meaning for every dollar you invest in your 401(k), employers will invest the same amount into your retirement.
Start Your Investment Plan Now
Why wait to start investing when you can start saving today?
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