Although it may seem hard to build wealth at such a young age, starting earlier with this process will allow you to develop more skills as time goes on and to learn from potential mistakes or situations. You’ll also be able to earn more money over time by starting early, since building wealth is a time game! This blog will teach you some tips on how to get started and how exactly to start building wealth in your 20s. 

Starting Off On A Wealth Journey 

You’ll Want to Start Early! 

If you’re going to start at some point, try to start before college or while you’re in college. This will allow you to make the most out of your time and will help your wealth start growing while you’re still learning. You’ll need to give yourself time for the money to begin increasing as well, so there’s a lot of patience that comes with growing your wealth! Some steps you can take to begin your wealth journey can include: 

  • Saving some money each month. Since you’re just starting out and probably don’t have a full-time job yet, you can start small by trying to save up to $100 dollars per month. This will allow you to make up for any losses later in life since you’ll have this money stored aside and apart from money earned during a job or career. 

Even saving just a small amount like $25 dollars a month will allow you to see growth in your account even after a year of savings! 

Plant with coins instead of dirt 
Saving some money each month or even year will allow your wealth to start to grow. In just a short amount of time, you’ll start to see progress if you stick with your goals!

Learn the Importance of a Savings Account 

By adding to your savings account from your checking account, you’ll be able to make sure you don’t spend the money that you want to save. It’ll be like a jail for your money, you can’t spend what you don’t have in your checking account! 

If you keep away some money for your savings, you’ll only be able to spend what you have in your checking account, which can ensure you don’t spend a lot as well. Impulse buys will be put on halt and you’ll only be able to buy what you need. 

Make a Budget 

Creating a budget will be a very important step in your saving money journey. This is because if you budget your money on essentials and purchases you want to make, you can essentially  eliminate unneeded purchases like coffee trips with friends. Some steps to creating a budget can include: 

  1. Figure out your income. When you have a set income you can start to figure out how much of it you want to save and how much of it you can spend. 
  2. Make a budget plan. When you have a set plan, it’ll be easier to stick with it and follow it. There are great tools for doing this as well like a budget book you can purchase on Amazon. Writing it down will help you remember your goals as well! 
  3. Have budget goals in mind. Have a list of long and short-term goals that you’ll be able to accomplish. You don’t want to set anything too high or unachievable for yourself. These can help to keep you motivated towards savings for your future! 
  4. Make adjustments if necessary. If you have something that goes over the budget for that year or month, try to make a small sacrifice somewhere else so you can stay on track with your spending and saving! 
A notebook and pen 
Something like a budget book can help you stick with your savings plans. It’ll allow you to track everything by writing it down which may actually be a better option for some people to view their goals and progress on paper! 

Try To Pay off Some Debt 

Debt follows us everywhere and increases especially if we go to college. Since most 20-year-olds are in or are getting out of college, this can be a problem for them in the future. To try and help pay off debt even with a low income, students should try their best to make small payments whenever possible, even if that means sacrificing some friend dinners here and there. You’ll want to make it easier on yourself when you’re older with children or a significant other so the best time to start paying them off is now! 

Student with a computer 
Debt can be scary but trying to get some of it paid off in your 20s is a great way to build wealth. Even just a little amount each year will put you in a good place since you’re starting the process early! 

Cut Back on Useless Spending 

A lot of things can be considered useless spendings like friend visits and coffee dates. But some of these could be cut back when you’re planning a set budget. You could try to only spend money on Starbucks once a week if you tend to go every day before work. You could even try your best at makeshift coffee at home. Here are some items and or things you may consider cutting back on: 

  • Shopping. Shopping at places like your local mall or outlet store can be limited to a couple of times a year. You could also save some extra money by thrifting instead of getting full-price clothes at stores. If you feel like you have some clothes that you don’t wear anymore, you may be able to sell them at your local thrift store as well to bring in some extra cash! 
  • Date or friend nights. You could save a good amount of money by cutting back on how many times you go out during a month or even a year. Try to save date nights for anniversaries or important events and friend hangouts could be moved to backyard parties and outdoor picnics instead of restaurants. There are many at-home alternatives for both of these types of nights like even renting a movie with store-bought popcorn instead of $8 dollar popcorn at the movies. 
  • Homemade coffee. A lot of people tend to need their coffee fix before work at their local Starbucks or Dunkin but by getting ingredients you love and making it at home, you can start to save a good amount of money! You also won’t have the hassle of waiting in long lines either unless someone is using your coffee maker before you! 

Big or small changes can make a difference in how much you save towards your wealth since going out can be costly! 

Friends sitting together and laughing 
It’s easy to find cheap and free options for friend hangouts instead of going out. These free get togethers can even end with more laughter and fun than a restaurant! 

Invest in Stocks 

Investing in stocks could be one way to increase wealth at a young age. You are a company owner when you buy stocks and can really benefit from the growth of stocks that you purchase. With stocks, you’ll be able to learn from mistakes and benefit from successes. 

Before you invest any money in the stock market, you’ll want to do some background and basic research to understand which ones you’ll want to invest in. Some good things that can come from investing in stocks can include:

  • The long haul. You’ll start to see progress in your investing after a number of years and can have some positive returns from sticking with the stock for a while. Or if you are in need of some money, you can always withdraw whenever. 
  • You don’t need a lot of money. Since you’re young and may not have a stable income yet, the good news is that you don’t need a massive amount of money in your bank account to start investing in stocks! 
  • Liquidity. You’re able to sell the stock at any time if you need some extra money or if you want to put that money elsewhere if you suddenly need it. 
Computer with stocks on it 
You can start investing in stocks at any time. When you invest younger, your stocks have more time to grow throughout the years possibly meaning a bigger cashout. Remember to research before investing so you know exactly which ones you’ll want! 

Hopefully, this guide gave you some helpful answers on how to start building wealth in your 20s. It’s a pretty simple process that can change the way you view your money and spending especially as a 20 something year old! Now go out there and save some money, make a budget book, or buy some stocks!

Posted 
May 26, 2022
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