Nobody wants to be controlled by money, which explains why many people (mostly 20 and 30-year-olds) should strive for the opposite. Taking control of your money translates into making sound financial decisions and also requires financial literacy. Did you know that only 3% of adults in the US have basic financial literacy knowledge?
It is better to gain more insight into this subject area as you make smart money moves while still young. Here are a few to consider:
Buying Your First Home
An owned accommodation is a top priority for adults, especially when they can afford it. What may seem appealing in your 20s and 30s is a rental property because it may not cost as much as making an outright purchase. However, if you have the finances to make a property purchase, now is the time to do it. On the other hand, if you prefer to use a mortgage, you will still have enough time in your active years to finish paying it off.
Buy a new condo to secure a decent accommodation while you look at other means to build wealth. The good thing about condominiums is that they are independently sellable and considered as real estate. In other words, you can own a condo for many years until you decide to resell your unit. Because real estate value appreciates, you can earn more than you initially bought it for.
Pay off Debt
You will most likely be dealing with repaying your student loans in your twenties and thirties. The guiding rule is to make it a priority while you’re still young. Owing money to a lender always affects your credit ratings, and until it’s paid off, your utilization rate will keep increasing. Unfortunately, lenders see such persons as high-risk borrowers. If you continue to owe without making any move to repay, it could affect your chances of accessing other financial products. Remember that the longer you carry debts, the more interest charges you will be required to pay.
To resolve all debt issues, financial experts recommend using 20% of your monthly net income to begin to settle loans. Even so, you can stretch this percentage a bit more to reach your goal of repaying outstanding loans quickly. It helps to also consolidate debts as a strategy to minimize the accounts you have to pay monthly. In most cases, you will enjoy lower interest charges. This option is only viable within a specific timeframe. If exceeded, the interest rates will increase.
Attach Seriousness to Health Insurance
Planning for your health is a logical and rational thing to do. Indeed, ill-health does not make prior announcements before wrecking the body. Assuming a health emergency is far from you is a formula for financial adversity. The COVID-19 pandemic has proven why buying health insurance is a must.
You never know; a significant health bill may come in ten years, and you’ll be glad you prepared for it. Besides, health insurance is always a good thing to have; even if it’s not for you, your future family will benefit from it. Choose a policy that is easily transferable, low-cost, and will provide comprehensive coverage.
In conclusion, controlling your money and making smart decisions will be beneficial in the long term. If you have the opportunity, it’s better to deal with the most challenging financial decisions now. Avoid wasting time and pushing off what you can do now to later.