Financial Planning in Your 20's

FINANCIAL PLANNING IN IN YOUR 20'S SETTING GOALS The first step in financial planning is to identify your goals. Your short-term goals (five years or less) might include a wedding, a honeymoon, furniture, a new car. Next, think about medium-term goals, such as owning your own home and financing your kids' college educations. Finally, list your long-term goals, such as retirement and travel. LIVING BELOW YOUR MEANS The key is to liv some wiggle room so you don't spend up to or above your limit. On your next pay check, try to save more and spend less. on less than you earn. Leave yourself %24 LEARN MORE ABOUT INVESTING It may be wise to invest in Certificates of Deposit or Money Market Funds for your short-term goals, and the stock market for your medium and long-term goals. Find out if your employer has a 401(k) plan or other tax-deferred retirement plan, and if so, advantage of it. Your contributions will be made with pre-tax dollars and taxes on earnings will be deferred until you withdraw them during retirement. take MANAGE YOUR DEBTS BANK Reducing, or, even better, eliminating your unsecured debt should be a priority in any financial plan. Paying off your debt is even more important than setting aside savings because debt typically grows at a rate that far outstrips the growth rate of savings. SAVING FOR FINANCIAL SECURITY Financial advisers recommend that everyone set up an emergency fund to help with an unforeseeable financial disaster, such as job loss, illness, an unexpected tax bill, or anything else that could pull the rug out from under you. As a general rule of thumb, an emergency fund should be about three times your monthly expenses if you're single and six times your monthly expenses FOR EMERGENCY USE ONLY if you are married or have children. GET HELP There are lots of resources and help available to get yOu started on the right financial track and motivated to stay on it. %24 Sources: Vogue Financial http://financialplan.about.com/cs/moneyforyouth/a/Advice20s.htm http://www.forbes.com/sites/mitchelltuchman/2013/12/11/financial- planning-in-your-20s/ http://www.financial-planning.com/gallery/fp/five-financial-planning- retirement-ti ps-for-twenty-somethings-advisors-2678502-1.html