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10 personal finance moves you should make in your 20s

It can feel like your going to be in the care-free twenties forever. But 30, is not far round the corner and there are a few personal finance goals to work towards before you hit the big 30. 

Emergency fund fully funded
This means you should have saved approximately 6 months of expenses (not income). Contribution to this should come after debts have been paid off. An emergency fund is such an important part of your financial portfolio and is really the gateway to a more financially comfortable lifestyle even when things get a little rocky. Make creating an emergency fund one of your financial priorities until it is fully funded. 

Regular contributions to retirement plan of 10-15%

Making consistent payments towards retirement throughout life is the sure fast way to having a care free retirement pot. Aim to contribute 10-15% and look for matched contributions by your employer.

Pay off student loan debt (and any other debt) 

So you've graduation nows the time to start paying off that debt you accumulated. Try to pay it off before making big financial commitments like buying a home so to allow you to have a clean slate to work from.Plus avoid accumulating any more debt.Just avoid debt, it really is that simple. If you are budgeting properly and have a fully funded emergency fund then this should be well within your ability. Work on prioritising how you spend your money to allow you to avoid debt. Stick to debit vs credit cards to allow control of how and when you spend you money. 

Have a debt free wedding

Weddings are very expensive the average wedding costs £18,000. When preparing for a wedding be conscious of the costs and look for opportunities to be frugal. Work within you budget and don't be afraid to haggle for a better price. 

Make regular automated savings

Making saving a priority and a regular occurrence means that you won't feel it and before not too long you will have a health savings pot. Set up a standing order to make automated savings from your current account. 

Be saving/ have saved for a deposit on a house of at 10% (20%+ is preferred)

Saving to put a deposit down is a big stage. It is important to save enough. Avoid the added costs of having too small a deposit. Aim for at least 20% but the higher the better. 

Take out life insurance 

If you have a spouse or dependents it is super important to take out life insurance incase of you sudden death. As you go through your twenties it becomes increasingly important to take out a policy and they can be for very little monthly payments. 

Buy a car, second-hand.

Cars depreciate in value very quickly, therefore it is better to invest your money in a second hand car where the rate of depreciation has began to slow down as most of the money is lost when you drive it off the forecourt. And most importantly buy it with cash!!

Prepare a will

You now have assets and possibly dependents, and you need to ensure that they are provided for in the case of your death. It is important and often overlooked by those in their 20s to prepare a will. It will make things a lot easier for everyone if you die. It is also important as it can help reduce the amount of inherence tax paid. 

Learn to enjoy money within your means

This is probably the biggest move as it is more about you attitude towards money and it is an attitude you will want to take with you for the rest of you life. Learning how to budget, and determine needs vs wants are key skills for being able to do this. Money, when managed well can bring great joy. But it is not the source of all happiness, it is a healthy relationship with money that will bring the most from it. 


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