Your 20s are the perfect time to set yourself up for long-term financial success. Small, consistent actions now can have a big impact on your money over time.
Here are three simple ways to start growing your wealth in your 20s.
1. Budget and Save
Creating and sticking to a budget is a great way to get your money under control and ensure you’re putting it towards what really matters. Include savings in your budget so that it becomes a higher priority, rather than something you think about after the fact.
2. Start Investing Early
There are several ways you can start investing without needing to become an expert on the stock market.
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Capture your 401(k) match. Find out if your job matches your contributions to your retirement account. If they do, contribute the maximum amount to take advantage of the full company match. This is an easy way to double your money for your eventual retirement.
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Open a Roth Individual Retirement Account (IRA). With a Roth IRA, you can contribute up to the account limit at any time, watch your money grow with compound interest and enjoy tax-free withdrawals when you retire. If you’re interested in a Roth IRA, check and see if your employer offers one.
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Automate your contributions. You can set up scheduled transfers in Apple FCU DIgital Banking by navigating to Move Money > Transfer Funds. Fill out the prompts to make your transfer, and when you get to Frequency, choose the timing that works best for you. This way, your money automatically moves into the internal or external account of your choosing, and you can let it grow without thinking about it.
3. Avoid High-Rate Debt
When managed carefully, debt is an incredible tool for building your credit, which can actually help you save money later in life. However, when you borrow beyond your means or accrue too much high-rate debt, your finances can quickly get knocked out of control because of interest.
If you have debt from student loans, credit cards or any other channel, come up with a plan to pay it off while sticking to your budget. The snowball method and the avalanche method are two popular ways to pay off debt, each with its own benefits for fast debt elimination and staying motivated.
Wealth Building: It’s a Marathon, Not a Sprint
Building wealth in your 20s isn’t about becoming rich overnight. It’s about creating good money habits that will help your wealth grow and let you live comfortably later in life.
By budgeting and saving, investing early and keeping debt under control, you’re taking advantage of your greatest asset: time. The sooner you get started, the more chances you’ll have to create the financial future of your dreams.
Need some more guidance? Learn how Apple FCU’s subsidiary, Apple Financial Services LLC, can help you with investment services.
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