“Focus on building an emergency fund,” Rodriguez says. “Everyone needs one because everyone is going to have an emergency come up.” Consider using direct deposit to send part of each paycheck into an emergency savings account or setting up automatic transfers from a checking account to savings.
TAKE ADVANTAGE OF THAT LONG TIME HORIZON
Youth may be wasted on the young, and so is their financial time horizon — at least for those who don’t seize it. Despite the various mistakes I made in my 20s, saving for retirement is one area that I didn’t neglect. Once I saw the power of compound interest via a retirement calculator, I quickly set up regular contributions to my 401(k). TIP: Use these years to boost retirement savings. One way or another, your 20s will have ripple effects on your retirement years. And life may get more complicated later, especially if you buy a house and start a family, making it harder to save for retirement. Tucking away more cash now can save you from playing catch-up in later years.
The article Trial, Error and What I Learned About Money in My 20s was written by NerdWallet on June 11, 2021, and originally published by The Associated Press.
SEAN PYLES is a debt writer at NerdWallet.
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