Here are some quick and easy financial tips you can implement now as a 20 year old:
Quick and Easy Financial Tips & Tricks
Improve your credit score.
Whether you’re applying for a mortgage loan, a personal loan, or even a credit card, you will need a good credit score.
A credit score represents your credit history. It allows lenders to evaluate you as a borrower. It shows whether you’re good at managing debt.
Your credit score is important, because it is the first think a lender will look at to decide whether to lend you any money. It also impacts on how much you can borrow and at what interest rate.
It’s very easy to find your credit score. Simply visit CreditSesame or Credit Karma for a free credit score and credit report. It’s important to know your credit score before you apply for a credit card or a loan so you don’t have any surprises.
Here some financial tips and tricks to raise your credit score:
1: Solve any outstanding issues with pass lenders, creditors, etc.
2: Get a free copy of your credit report to make sure everything on it is accurate.
3: Correct any issues on your credit report and get them removed
4: Don’t make too many inquiries.
5: Set up automatic payments for all of your bills so you don’t forget about them.
For more financial tips and tricks on improving your credit score, read: How to Raise Your Credit Score to 850.
Save money as early as possible.
20 year olds have the luxury of time, so these money tips work in their favor as opposed to a 30 or 40 year old.
Especially when it comes to savings and investing, the earlier you start, the more money in your savings account will grow. It is due to compounding interest.
Where to save your money?
You should always look for the best interest rates. A really good way to save money for 20 year olds, is to open a high interest online savings account. That way you can earn as much as 2.20% APY. You can even get better rates by opening a certificate of deposit (CD).
Live below your means.
You have probably heard it a million times. But living below your means is perhaps the most important financial tips to implement in order to achieve financial stability.
If you spend more money than you make, then you won’t have money saved up to invest in wealth building assets that have to potential to make you financially stable.
Living below your means, as a step, can be very easy for you to implement, as long as you have the discipline. Once you commit to it, it will become a habit.
Pay more than the minimum payment on your credit card
One of the best financial tips and tricks to avoid paying interest on your credit card debt is to pay more than the minimum.
Let’s say you have $3,000 owing on your credit card at 16.5%. If you pay only the minimum payment due each month as shown on the card statement, the balance you owe will reduce very slowly and you will pay nearly $5000 in interest.
Don’t use your credit card all the time
Credit cards charge a high interest rate so you are usually better off to save for things like a holiday. It will be cheaper in the long run as you won’t pay interest on it and you will enjoy it more knowing you worked for it.
Make extra money
A popular way to make money is to complete online surveys in your free time. Companies are always looking for people to test their products and to answer surveys.
You can spend a few minutes of answering surveys and earn anywhere $5 to $10 dollars per survey. For example, InboxDollars is one of the great money hacks that can make you money.
Start investing now even if you have very little money
One of the main excuses I’ve heard people make is that they don’t make that much money in order to invest. However, one thing you have to realize is that it’s never ‘too little’ to start investing. Before you start investing, learn how the stock market works.
Some investing apps, like Acorns, rounds up your spending to the nearest dollar every time you make a credit card purchase and invest the difference in index fund and ETFs.
For example, if you buy a cup of coffee for $3.50, your account will be debited with $4 and Acorns will save and invest the 50 cents for you. This is one of the best money saving tips as far as making savings and investing almost painless for you.
Implement these money tips can set you in the right path.