by Ricky Publico, on category "Personal Finance"
September 5, 2019
So how does being young feel like? You’re probably fresh out of college or maybe you’re in the middle of your 20s. It’s a time to live young, wild, and free, as the popular rap song says. But at the same time, being in your 20s is also the perfect opportunity to make financial goals because let’s face it, you’re not getting any younger.
Apologies if you’re nearing your 30s, but hitting the big 3-0 is a big deal. You’ll be a full-fledged adult. You’ll be expected to contribute bigger things to society. So why wait when you can do all those things now? You can start building a better life as early as now. All it takes is a little financial planning and a little hard work sprinkled in.
As an old Chinese proverb once said, “The best time to plant a tree was 20 years ago. The second best time is now.” Before you reach 30, start planting that tree with these financial goals in mind.
Once you turn 30, you will hear the word “budget” a lot. In fact, your life will revolve around that word. What you can and can’t do in life will be determined by how much your budget for anything is. That’s why as early as now, you should familiarize yourself with budgeting your expenses. Start small if you have to, as long as you get the basics.
Budgeting is a key step in setting financial goals. Remember what the anime SlamDunk taught us? Rebound controls the game. Likewise, budgeting controls the game of life. Once you cross your 30s, you’ll realize how every plan starts with allocating your resources, especially money. Cultivate other money habits as well while you’re at it.
It’s one thing to save up for the future, it’s another to save up for the near future. It’s a no-brainer that you need to build your savings, but not a lot of people know about the importance of an emergency fund. For the uninitiated, an emergency fund is reserved for unforeseen situations like a medical bill, job loss, or house repair.
The rule of thumb for an ideal emergency fund should amount to 3-6 months worth of your salary. But in reality, you can just set aside whatever amount you can, as long as you build enough funds to shoulder an unexpected and equally expensive purchase. Don’t forget to add this goal post to your long term financial goals.
A list of financial goals will not exist without this one. Seriously, check out other lists like this and nine times out of 10, you’ll see this bad boy right here. How can it not be when it’s totally worth it? Investing your money is a great way to generate passive income. Imagine receiving money for not doing that much. You’d be foolish not to make this part of your financial goals.
And nowadays, investing has never been this easy. You can start investments for as low as PHP 1,000. That’s like four cups of coffee from any trendy coffee place. It sounds like a complicated thing, but investing has now become one of the most important financial goals out there that even the uninitiated can easily catch up. Start early and don’t look back.
Read more: 7 Best Investments for Magastos Millennials
Investment’s not your thing? If you really love working hard that much, why not start your own business? Just like investing, starting your own business nowadays can be a piece of cake. Even if you have a small capital, you can get the ball rolling with your makeshift business. All you need is creativity, hard work, and a bit of luck.
The fact remains that you can have your very own business before you even turn 30. How’s that for financial goals? You can even make use of your own skills to help add to your income. Do you have a marketable hobby like baking, sketching, or web design? Start providing goods or services to everyone you know. After all, nothing beats a word-of-mouth type of hype.
You probably learned how to drive when you were a teenager. Now that you’re in your 20s, step up and add getting your own car to your financial goals. Owning a sports car sure is fun, but it’s not really ideal for your age. You’re better off with a cheaper car that is easy to drive and maintain. Set aside the aesthetics for a while and think economically.
Now you might argue that commuting is cheaper, but that also means sacrificing a lot of conveniences. Don’t settle with the everyday grind of public transportation. Now that your setting personal financial goals, it’s ideal to aim for a higher quality of life. And if that means getting your own car, then by all means—get that car.
You’ve probably heard the concept of insurance a lot from your older counterparts. Simply put, insurance provides financial protection from unforeseen events. It’s dreadful to think about, but learn more about life insurance and how it will benefit your loved ones when you pass away.
To make this achievement a lot sweeter, aim to afford insurance for other important assets. Get yourself a comprehensive car insurance for your new car. You can even get smartphone insurance for your beloved gadget. Affording insurance for yourself in your 20s means you already have what it takes to live a comfortable life in your later years.
While it is entirely normal for Filipinos to never move out of their homes, it’s also ideal for you to own at least one type of real estate. Whether it’s a house and lot or a condo unit, this should be an integral part of your financial goals. You don’t have to own it now, but you should start saving for it now that you’re part of the working class.
A few years of saving will eventually earn you a place you can actually call your own. You can either get cozy in it or have your place generate passive income by renting it out through Airbnb or other renting services. Start saving up as early as now and alternatively, you can start building a good credit score so you can land a better housing loan deal in the future.
Read more: Bad Money Habits That Ruin Your Credit Score
No rush, of course. This list should only serve as a guide for when you start planning for your long term financial goals. Tick off a minimum of three goals and you’ll be set for life. It’s not a race, but if you want to maximize your limited time on this earth, start asking the right questions like, “What goals do I want to achieve?” Find the answer and start working hard to achieve it, preferably before you turn 30.
GIFs taken from giphy.com