As I enter my 30s, I look back on my financial history with concern. Sure, some of it was unavoidable, but there was a lot of spending on things I didn’t need. Those credit cards were probably a little too close at hand. Here are some easy financial tips for your 20s that will set you in a much better place come 30.
Start an RRSP Fund
A Registered Retirement Savings Plan isn’t something you have to wait until you’re in an established career to start. Even working that minimum wage grind you can contribute a small amount every month depending on what fits into your budget. The sooner you get started, the better. Rather than waiting until you’ve got the big job and wasting 10 years not having saved. The money you contribute can even be used to get you a break on the amount of tax you owe come tax season.
Invest Your Money (even if it’s just a bit)
That $1000 just sitting in your account taunting you can be put to better use by using some low-risk investment options. A High Interest Savings Account (HISA) or Guaranteed Investment Certificate (GIC) can help grow your savings even when there isn’t much being put in. Talk to a financial advisor at your bank for some low-risk options to grow your money and put it to work for you.
Keep Track of Your Credit Score
It’s a common misconception that checking your credit score can affect it. It’s actually important to understand what is happening. Use an online free credit checking tool to see what your credit rating is and how it affects the products and services you can access like mortgages and car loans. There’s lots of free services online that help explain and coach you on what your credit score means and what it does for you.
Be Smart About Your Debt
There is good debt and bad debt, learn the difference. Good debt, like your school loans and mortgages, help build your wealth and income over time. Bad debt, like credit card debt and other consumer debt, does little to nothing to help improve your financial situation. So, while school loans may seem like nothing but a weight, they are an investment in your future, while the credit card is more of a blackhole for your money.
Be Wary About Mixing Love and Finances
They may seem like “the one” when you’re together but tying all your financial assets into someone else’s could harm you in the long run if the relationship sours. Joint accounts, shared credit cards, and paying bills together can lead to ruined credit scores that make it more difficult for you later in life.
Stick to these tips early and you’ll find that there’s less pressure in your 30s to work that second or third job and you’ll be in a better place financially. Be kind to your future self and make that money work for you.