5 Good Financial Habits for 20-Somethings

Source: Thinkstock

Source: Thinkstock

If you are in your 20s, you are at the perfect age to start prioritizing your finances. Whether you just got out of college, or you have been working for a few years, planning for your financial future early can help set you up for a financially stable life down the line. You are young enough that saving money shouldn’t be everything you think about: You still have time to have a little fun. Still, the earlier you start saving, and the faster you pay down debt, the better opportunity you will have to accrue more money later through interest and long-term saving. While you are still young to worry too much about retirement, it’s never too early to start preparing for all aspects of the future. Here are five habits that you should learn and prioritize now in order to be financially secure later.

1. Live within your means

One of the most important financial habits you can start now is to learn how to live within your means. If you consistently spend more than you make, you will set yourself up for debt or financial hardship later. According to the The 2012 National Financial Capability Study, 19 percent of individuals reported that their household spent more than their income within the last year, and that didn’t even include the purchase of a new home or other large investment. Instead of spending recklessly, make sure that you spend only as much as you can afford. Make a budget, determine how much you need to spend on bills and how much extra income you have, and then stick to a budget.