Why is it important to have financial goals in your 20s and take them seriously? Because
your 20s are there to build your financial foundation for your 30s and 40s and beyond.
Remember: "You make or break your 30s in your 20s".
That's exactly why today I'm giving you 5 important financial goals that you should
definitely achieve before your 30s so you have a good foundation for your next years.
These goals helped me to have more direction and not get lost in the process so that I
am now financially well positioned and don't have to worry about money anymore. I'll show
you my top 5 goals and how you can achieve them in this video and at the end I'll give
you a tip that helped me reach my financial goals faster!
But before we dive into the topic : Hello and welcome back to our channel ! And if you
are new here : We are the finance nerds and on this channel we are helping hardworking
people like you to get more out of your hard earned money by showing you how to use your
money in the most effective way. Remember to give this video a thumbs up at the end,
if you got value out of it and now let’s start.
Get rid of your debts The first goal should be to eliminate your
debts that you have accumulated over time. This includes all types of debt: Student loans,
credit card debt, and all other types of debt you've incurred to date. But why should this
goal be your absolute focus? All of your debt, or loans, are costing you interest that you
have to pay off every month, and those payments are kind of like pay cuts you've given yourself.
This leads to you having less money available each month and then when big bills come, you
get back into the cycle of taking out another loan to pay that bill until you reach complete
financial ruin. This is exactly what you should avoid at all costs for your future self and
your future family, so put your debt payments at number 1 on your priority list!
But how exactly can you achieve this goal now?
There are basically 2 ways: 1. you reduce your expenses
2. you increase your income. The easiest way to reduce expenses is to make
a cost breakdown of your total expenses and discover unnecessary expenses. Do you have
current subscriptions that you no longer need? Can you perhaps save on electricity or heating
costs? Save all unnecessary expenses and use them to pay off debts. Another alternative
is to make a debt restructuring. In this case, you replace one loan with high interest rates
with another loan with lower interest rates. If you are interested in this, feel free to
check out my video description, there you will find providers and other resources or
make an appointment with your financial advisor.
Build An Emergency Fund The 2nd goal of yours should be to build an
Emergency Fund. Why is this so important? The future is always a little uncertain and
we never know what can happen and it makes sense to be financially ready for the unpredictable
events so that you at least have the financial peace of mind no matter what challenges you
face. In most cases such situations are the ones where most people get into debt or completely
destroy their financial situation, because most of them only live in the here and now
and always live from paycheck to paycheck. This leads to the fact that when something
unforeseen happens like a big car repair, they then have to take out a loan for it and
get further into debt. What's the best way to approach this goal?
First, you should calculate your living expenses and then it is best to set up a completely
new account that is just for your Emergency Fund. After that, you set a percentage rate
of your income that will be automatically transferred from your salary to the new account
every month. I recommend saving between 5-10% of your income into your Emergency Fund until
it covers 3-6 months of your living expenses and As I mentioned in the beginning, I'm going
to give you a tip that I used to reach my financial goals much faster than I planned,
so stay tuned so you don't miss it.
Boost Your Retirement The 3rd goal you should tackle is to boost
your pension. You might be thinking to yourself, "I should be worrying about my pension right
now?" Yes, that's exactly what you should be doing! Why? Simple, the future is uncertain
and who knows how much money will be left when we are old. The retirement age is getting
later and later and the pension is getting smaller and smaller. Personal responsibility
is the order of the day at this time and the earlier you start, the more relaxed and easier
your retirement life will be. I do not mean that you should live only for your pension,
but simply now to make something for this stage of your life and to provide.
How can you tackle this goal? The first thing you should do is clearly make
the decision to start today and then there are several ways you can go about it. You
can open an IRA with a traditional IRA or a Roth IRA. Which one suits you is an individual
matter. In addition, you can also open your own investment account and then invest your
money automatically into your account and use that money to supplement your retirement.
For this there are many automated investment plans in which you can invest your money automatically
every month, if you are interested in the whole thing please write me a comment under
this video with "automated investing" and I will make a special video about it.
Start Investing NOW no matter what Right after the last goal, the 4th one should
be to start investing your money right now and today. Why? 2 reasons:
1. inflation 2. appreciation
According to Statista, the inflation rate in 2021 has risen to 4.28%, which is the highest
inflation rate since 1990, which means that when we put money in our bank account, it
will be worth less and less over time. If we start investing our money now, we protect
our money from decreasing in value and also achieve an increase in value at the same time,
if we invest our money intelligently. You do not have to be an expert to invest intelligently
and there are several ways to do this. You can invest your money in stocks or real estate,
where investing in stocks is much easier and more accessible than investing in real estate.
There are many providers that support you in investing and offer different investment
savings plans, just look at my video description there you will find providers and other Resources
that support you. If I were you and wanted to choose an easy
way, I would create an investment account and start investing with monthly deposits
in ETF savings plans such as the MSCI World or in savings plans that focus on dividend
stocks.
Rebuild Your Spending Habits The 5th goal should be that you focus on your
habits with your money and steer them into the positive. Habits determine your success
or failure and not only with financial issues, but in general. Therefore, it is incredibly
important that you create positive habits and follow them consistently, because knowing
what good habits are and knowing them is one thing, but the other and crucial thing is
to implement them constantly. So what are good financial habits and how
do you stick to them? The most important financial habit in my eyes
is to keep a budget and review it at least once at the end of the week. Without a budget
it just doesn't work, because with a budget you have full control over your finances and
also a clear overview of your income and expenses. If you want to know how to create a budget
for yourself within 10 minutes, just click on the linked video in the top right corner.
But how do you stick to this habit? Here's how I do it:
I have a Habit Tracking Sheet where I list all my habits that I want to stick to and
it has my budget on it. I sit down every Sunday and review my budget and when I have done
it, I put a check mark in my Habit Tracking Sheet. That way I don't forget and I train
myself to do this habit. Now, how did I manage to reach my financial
goals faster than I planned? I started to focus on my financial education
and was able to reach my goals faster because I learned new ways, opportunities, strategies
and approaches that helped me make better decisions. For example, I was able to make
better decisions in my investments and come up with a new strategy for myself that now
gave me 5% more return in 2021 than the previous year and that's my tip to you too: focus on
your financial education! To take the first step -> Watch the video
in the middle now where I show you the 6 Timeless Money Rules. With these rules you will build
a solid foundation and understand the money game better.
And If you enjoyed the video and now want to know more about how to take control of
your finances check out the video description. There you will find more videos and resources
to help you to have more money at the end of the month.
And remember to hit the like button and subscribe to the channel if you are new here
We hope to see you in the next video.