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What does it mean to be financially responsible in your 20s? Ron Tank teaches us the essence of making the best financial decisions that will have a lasting impact on a young person’s future.
Welcome to your 20s, where it’s all about figuring things out. It’s a fleeting decade in one’s life where exploration and development are at their peak. And since you’re on your own now, you need to maintain good habits, which will be your most significant asset long-term.
Being lost in your 20s is normal, but not in a financial way. Money is a touchy subject for some, so some people choose not to equip themselves with sufficient financial literacy, which is supposedly beneficial.
Financial responsibility for every young professional
Money is always the most crucial element for a person to be stable. It makes supporting your needs and wants possible, especially in this economy. While you are on your journey to being financially responsible, make effective financial moves that will set you up for life. After all, one must be prepared for every rainy day.
Thankfully, you won’t have to struggle knowing how to secure your finances with the help of Ron Tank and his book ‘The Moses of Wall Street.’ Tank teaches readers how to be well-adjusted in utilizing a finite resource such as money. He emphasizes intentional investing, which is founded on biblical truth.
As you browse this guide, remember that any financial decision will affect you and the people around you in the long run. Now is the time to build healthy financial habits to reap their benefits later.
Road to being financially responsible in your 20s
Things like saving, budgeting, and investing are essential for financial freedom. As a general rule, setting aside will prevent you from being in a bind with overwhelming debt. You will also better handle emergencies and take advantage of any financial opportunity when presented.
As you pave yourself towards financial stability, take this advice as a precautionary tale to take better steps you’re about to embark on.
Create a strict budget for yourself.
Your income should always be the benchmark for setting a budget. It also serves as your guide on deciding how and when you’re spending money. Limiting your income via budgeting empowers you to designate and know your priorities well since they have been accounted for. Additionally, you won’t have to worry about what’s left of your income because a strict budget has been set.
Another suggestion would be a budgeting app with features that help provide the best personal budgeting options. It might even help you be more aware when you’re close to overspending, so it helps when you have one.
Discuss your budget regularly.
Ensure you review your budget for a few minutes daily to observe if you have gone over the line. The more precise your vision is regarding your total expenses, the better you can spare yourself late fees and other unnecessary charges.
By reviewing your budget carefully, you can trace where your money goes, preventing fraudulent or suspicious transactions. If you have a partner, discuss this with them thoroughly so you can keep track of each other’s spending. Financial troubles can cause any relationship to crumble, so you must never be negligent as a couple in managing finances together.
Conduct a monthly balance of accounts.
This step can surely be tiresome for people in their 20s, but keeping track of your accounts is necessary. The more you know the amount left, the more you’ll have self-control from drawing your account.
So pull out your bank statements from the drawer, open a digital worksheet, use your phone or a standalone calculator, and compute your past transactions accordingly. In case you find any discrepancies, be sure to contact the bank immediately so they can address the situation.
Start your retirement account early.
Indeed, you have heard of the 401(k) and other recommended retirement plans out there. Your early contributions are a matter of delayed gratification, which might be unpleasant for some—especially those who live from hand to mouth.
However, the catch is this: your small contributions will have a more significant effect on your future. Once you retire, you’ll reap the benefits of having saved up early on. Start your retirement account early if you want that golden retirement year without worrying about a single penny.
Practice self-control against impulse buying.
Impulsivity is the enemy of money saving. It is complicit in making you buy the things you think you want. To avoid this, shop with a list and carefully plan what you need before buying them. It is heavily discouraged to walk into a supermarket or any store you feel like going to with the ‘just in case’ mindset.
In conclusion
Being in your 20s and training yourself to be financially responsible is daunting. However, you will find fulfillment in balancing your work, savings, and leisure if you set enough boundaries with your money. While being financially responsible as a young professional is demanding, being one saves you the hassle of ruin and constant stress.