Your 20s is usually full of misadventures, late nights out and romantic fall-outs. Add student loans, bad credit and your $1500 shoe collection to that list and you get the picture. Here are five easy ways to deal with debt in your 20s!
- Know Your Financial Limit!
Learning your financial limits during your 20s is the best way to set the financial boundaries for the rest of your life. Lean on your experiences to understand what the minimum amount is needed to make yourself happy. If drinking that one $4 beer was enough to get you happy and drunk on a night out then that $4 beer should be the gold standard of how much you are willing to spend on alcohol on any night out. Feeling financially hurt but still not happy after spending $700 on that Coldplay ticket? Then maybe your financial limit should be $50 on the next set of tickets. Learning from these experiences make you the person you are tomorrow. Yes as you grow older your income and standards of living might increase but it should not justify spending that much money on Coldplay tickets!
2. Be Aggressive!
Becoming Chuck Norris in your 20s is a great way to learn how to fight debt. Be aggressive, be tough and above all learn that debt does not have your number instead you have debt’s number. Go all out and throw that credit into the fire pit. Do whatever it takes to show debt whose boss!
3. Build a Budget and Stick to IT!
One important lesson to control debt in your 20s is to build a budget and stick to it Having a budget in your 20s allows you to track how much you spend on any given day, month or year. By tracking your spending habits you gain knowledge. Use that knowledge and you are able to make better financial choices. Making better financial choices saves that 20 dollars you would have otherwise spent on organic moo moo juice. Build a Budget and Stick to it!
4. Learn to Live Frugally
Be the next Warren Buffet of your age group. Learning to be frugal is another great way to fighting debt in your 20s. Instead of eating out every day learn to cook your meals in batches over the weekend. Instead of spending 20 grand on that new beemer buy a $1500 clunker and drive it until it falls apart. Learning this lesson in your 20s is a slick way to be debt free the rest of the life.
5. Save, Save and Save Even more!
Learning to save until your financially butt-hurt is a great way to get ahead of debt in your 20s. Every year counts and the earlier you start saving the further you are ahead financially in your 30s, 40s and 50s. Take that 300 dollars you would have spent on those pair of nice sneakers and instead throw that cash into an Dividend Paying Stock, Robo Investor or even a High-Interest Savings Account (Equibank offers 2.3% interest right now) Being able to save 30 – 40% of your income in your 20s is a crucial building block to creating passive income and financial independence. Building a financial nest egg in your twenties makes you better prepared to deal with any future debt that rears its ugly head. So Save, Save and Save some more!