I believe that how you behave in your 20s with your money can definitely change everything. If you start investing, saving, paying off debt now, then you are preparing yourself for retirement at a great time. Compounding definitely plays a huge factor in starting young also. If you save $1,000 a month for the next 40 years, then at 6% interest you will have
But if you wait to save until 20 years later and save $2,000 a month in order to catch up, then after 20 years at 6% interest, you are only at $935,825. BIG difference right? The time value of money definitely plays a big part in this, so the younger you can start, the better!
There are many things that I'm doing now to prepare myself for my future. This involves, my spending habits, budgets, schooling, my career and so on.
What I'm doing:
- Went to college and graduated with two undergraduate degrees. This helped me a lot when I was applying for jobs and I also feel more rounded (even though both degrees were business related). I wouldn't be able to be in my field without my degrees.
- Working on my MBA. This will help me with my career and also a higher salary with more opportunities.
- Secured a good career. My job is very stable and will if anything grow by an exponential amount. There aren't too many people who do what I do.
- Advancing in my career. I'm working on my credentials and I should have them this summer as well. I just have to take one more test and turn in sample reports (these are extremely long). I need to start working on my sample reports soon.
- Live within my means. This one is different from the others that I just listed. Living within my means is something I do, but also something I could work on.
- Paying off my debt. This is a big one! I hope to have my student loans completely gone by next year and then my house to be paid off in less than 5 years from now. WHOO HOO for goals.
I also have a fully funded emergency fund. My job is pretty secure, but you never know if something might come up. With an emergency fund I don't have to worry as much and worry about living paycheck to paycheck.
One thing I DO need to start concentrating on more is investing. I know a decent amount about investing and finance (I am a Finance MBA major and I work in the financial services industry), but I'm still unsure of how exactly I want to allocate all of my investments. And until I'm positive that I understand everything (hey I have an investment mind just like Buffet, maybe one day I'll be a billionaire, ok probably not), this is kind of hindering how deep into investing I'm getting.
Another area I would like to work on is getting a more stable side income. Maybe blogging? I'm still not sure. I have so many ideas floating around in my head though.
Of course there are many things I want to do in my 20's also. I don't want to look back on my life and feel like I missed out on anything. As I've said this whole week, I budget and watch my spending so that I can do the things I love in life.
In my 30s, I'd like to do a lot of things. It just seems so crazy to think of myself 10 years from now! I'd hope to have a family, no debt, great investments and lots of world travels. In my 40s? Not really sure. I haven't thought about my life that far ahead honestly. I would hope to be able to retire early though.