Among the countless stereotypes about young people is the belief that they manage money poorly. 20s participate in employer how To Invest Your Money Wisely At A Young Age plans. But evidence also shows young adults behave wisely—when given the opportunity. Making these stereotype-defying smart moves early in life can pay big long-term: Think millions. And those in their third decade still have plenty of time to learn basic principles that will lead to a happier, healthier financial life.
So, if you haven’t yet, check out MONEY’s list of financial rules to learn before you turn 20. Then read on for 10 things to know about money by age 30—and beyond. Fewer than 2 in 5 millennials negotiate their first salary. 200,000 in extra wealth by retirement. You’re more likely to get the salary boost you want if you come prepared with a specific figure or range that shows you are informed about what’s most appropriate for the position. Only half of millennials have ever checked their credit by ordering one of the three free credit reports everyone is guaranteed each year. That’s a problem, because credit scores are very important: Having a good score allows you to qualify for lower-interest loans, which means when you take out a mortgage, for example, you may end up saving literally tens of thousands of dollars. Improving your credit score can actually be pretty easy, but first you need to understand a few unintuitive facts.
Looking for other ways to boost your score? And, of course, always pay your credit card bill on time. A recent study found that only 1 in 3 millennials has enough money saved for a single emergency room visit or car repair—forget about covering rent and food in case of a job loss. So while your 20s might be a great time to invest in your skills and experiences with travel, grad school, and other worthwhile expenses, it’s imperative that you sock away enough cash for worst-case-scenarios. Even if you know—in theory—that you’re lucky to work for a company that offers retirement benefits, you may feel overwhelmed and turned off by the pages and pages of fund information from your plan provider. Just remember three basic principles: Maximize contributions, minimize fees, and diversify investments. Also watch out for fees, which can eat away at your savings, potentially to the tune of hundreds of thousands of dollars.
Try to choose funds that charge expense ratios of less than 0. Many of those same index funds may come bundled up in what’s called a target-date fund, which contains a mix of stocks and bonds appropriate for your age. Two out of every 5 millennials has credit card debt. And a similar proportion has student debt in addition or instead. Credit card debt, on the other hand, may feel particularly inescapable. If you struggle to pay even the minimum each month, it can be especially discouraging to watch the interest you owe grow and grow. One short-term fix: Consider a transfer of your highest-interest balance to a card with a lower rate. Check out MONEY’s list of best credit cards, including the best low-APR cards for those carrying a balance. Then take a page from the behavioral finance book and focus on tackling small balances first.
You might think you can put off learning tax strategy until you’re older and your income is higher. But there are important tax perks that twentysomethings can start taking advantage of right out of school. 2,500 in student loan interest to reduce your taxable income, even if you aren’t itemizing other deductions. You can also deduct your moving expenses if you have to relocate for a new job—as long as you move more than 50 miles for the position. 2,000 you contribute to a retirement account each year. You may have heard that investing in real estate can earn high returns. A well-maintained home in a desirable neighborhood certainly can increase in value. But transaction costs will likely counteract any gains if you don’t live in the home for at least 5 years.
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Check out MONEY’s list of financial rules to learn before you turn 20. At the same time, gave me a fair idea on investment. Or avoid investing because you feel the economy is in a recession.
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So unless you plan to rent out part of your house to generate income, don’t assume your home is going to be a killer investment, even if it is a very nice place to live. 1,000 or less had a lower-than-average divorce rate. The researchers did not study the underlying cause of the findings, though they floated the possibility that lower expenses led to less marital strife. Either way, if you’ve got a wedding in your future, you now have at least one compelling reason to control costs. To cut wedding spending, consider three easy money-saving hacks: choosing a relatively inexpensive public or city-owned venue, asking for cash gifts to a site like Honeyfund instead of traditional registry gifts, and inviting talented friends to pitch in on food prep and decorations. The cost of raising a child to adulthood is a staggering quarter of a million dollars, according to one recent measure. And that doesn’t even include the costs of pregnancy and college.