The Finance Issues You Should Avoid in Your 20’s

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You’re young, wild and free! The last thing on your mind is planning your future. You want to live in the now and enjoy every moment of it. While this may help you in making some fond memories, it’s better to be smart about your future, to protect yourself from trouble. When you’re in your 20’s, everything seems more important than planning out your future. However, with student loans, housing, transport, health care etc becoming so expensive, it’s probably a better idea to help yourself from the start.

Some very primal decisions made in your 20’s can help you out in the future years. Decisions on which school to go to and what to study, to where to live and what vehicle to purchase can be the key decisions that help improve your eventual quality of life.

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Negotiate Your Salary

Know what you are worth. Do your homework to make sure you have an idea of what a position like yours should pay. For those who do not negotiate their salary, an average of £500,000 is lost throughout their career. It’s a great idea to ask the hiring manager if the salary is negotiable. If it isn’t, the most you’ll be told is just that! If the actual amount isn’t negotiable you might still be able to get extra vacation days/ sick leave etc. Don’t shy away from asking.

Choosing Your Major

Going to college is extremely expensive and costs about £35,000 a year. However, it still is a great investment. Make sure you are choosing the right career for yourself. While interest and talent is of course important, think about where you’ll get a return on your investment. Studies show that engineering and math majors get the highest ROI.

If you’re unsure of what subject you want to major in, then consider going to a community college while you figure it out. You can save quite a bit of money by doing so and transfer your credits when you are certain of what you want to study.

Live With a Parent after Graduation

We know how you might feel about this! But it’s honestly a fantastic way to save some money and give yourself an advantage for when you do move into your own place. Consider living with a parent. With an entry level position after graduation, you will be living hand to mouth and will be unable to save much money. If you absolutely do not want to live with your parents, consider getting roommates to reduce the cost.

Credit Card in Mousetrap

Wrong Use of Credit Cards

When you’re young, most chances are you are going to be impulsive. Most chances are you’re not going to be able to actually afford being impulsive. And most chances are that this is going to lead you to credit card debt which will leave you with a low credit score. A low credit score will limit access to loans when you need it. You’ll have to pay a much higher interest rate when you buy a car or a home. This happens when you begin missing payments on your credit cards. A lesser known fact is that this can also occur when you apply too many times for a credit card.

Avoiding Renter’s Insurance

It’s a good idea to take out a cheap renter’s insurance policy. Landlords usually have an insurance policy for the building. Unfortunately, this won’t include your belongings in case any of your valuables gets stolen or damaged. If you have renters insurance, you can replace thebelongings if there is a fire, theft or any such issue.

Assuming you don’t need Insurance

So many young people end up going into major debt because they are uninsured. They then have to pay for health care out of the pocket. Take the time to figure out a good healthcare plan for your needs. Keep in mind that an accident or sickness does not announce itself before it comes. Make sure you are insured to avoid any out of pocket payments. A lot of young people may think that getting the cheapest plan is the smartest thing to do. However, along with the cheapest plan comes a high deductible. Make sure you are able to afford that. If you are unemployed, consider getting on to your parents plan if that is still an option for you.

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