Being 25 is a remarkable age! You’re probably financially independent and understand some of the complexities of life, but yet you’re young enough to navigate through life in a carefree way. When it comes to money, it’s a great time to develop good financial habits that will form a solid foundation as you start to build wealth through your lifetime.
Instead of only following standard advice out there and spending less than you earn, paying yourself first and starting your retirement fund early (all of which is excellent advice by the way), why not put in a little more effort and work on some of the slightly harder aspects of personal finances? To be honest, it’s not that hard. It just requires small and consistent actions each day that, over time, will have an immense impact.
Invest in yourself
Spend time, money and effort on learning as much as you can about personal finance, investing money and entrepreneurship. It won’t all necessarily make sense to you now or apply to you, but having that knowledge and being able to build on it in the future is invaluable. Creating the habit of investing in yourself is the first step to financial freedom.
Stay away from debt
This is really hard, and you may already be on your back foot with a student loan. However, take a look at your current debt situation and plan not to take out any more as well as at how to pay off the debt.
Get into the habit of only spending money that you physically have. Don’t rely on the money you may make sometime in the future or the money that someone owes you. If you don’t actually have it, then you cannot spend it. Applying this habit to your life will help you stay out of debt and keep you from the terrible stress that comes with debt. Being debt-free is an essential element of financial freedom and definitely something worth working towards.
Track your expenses
Tracking your expenses and managing the outflows are far more important than looking at your income. You can quickly work harder and find a way to earn more, but it is very tricky to stop yourself from spending money. You don’t need to stop having fun or feel that you’re not allowed to spend any money. Just form the habit of tracking all your expenses and analysing them monthly. Knowing where you spend your money will help you understand your priorities and give you the power to make informed decisions.
Investing in yourself, staying clear of debt and knowing exactly where your money goes to each month will set you up for future success. You don’t need to make drastic changes all at once but being conscious of your money and creating good financial habits is something that your future self will undoubtedly be thankful for. Life is a journey, and so it is with money. Enjoy where you are now and learn all the lessons you can while you’re still young.