Upon finishing college, my financial situation was rather precarious. I didn’t step right into a job with a yearly wage of $50K immediately following my graduation. Despite holding a degree, I found myself living with my parents, juggling four jobs, and just about managing to cover my student loan repayments. At that time, the notion of having a career felt far-fetched. Astonishingly, within five years, I was able to multiply my salary by more than three times. However, this improvement in my professional and financial life was gradual and did not happen overnight.
One critical observation I’ve made while watching my younger brother, a recent graduate in his early twenties, is that our generation, the millennials, have a propensity for immediate gratification. We see the affluence our parents enjoy, their homes, and luxury cars, without acknowledging the years of hard work required to accumulate such wealth. The desire to match or surpass the apparent life standards of our peers, as portrayed on social media, often drives us into hollow competitions for the most extravagant yet unneeded possessions to maintain an illusion that we’ve got ‘all things sorted.’
However, a life spent in continuous financial juggling, living from paycheck to paycheck is definitely not a goal anyone should aspire for. Utilize your twenties to establish a firm financial foundation that-paves the way to a tranquil, debt-free life. Here’s my advice to you, recent graduates, for a fiscally secure journey through your twenties.
START INVESTING IN A 401(K)
Once you secure a job providing health benefits and a 401(k) opportunity, ensure to contribute maximally to obtain your employer’s match. Suppose you’re required to invest 6%, and your company contributes 3%; you have the potential to save 9% of your annual earnings for retirement.
An automatic deduction into your 401(k) from your salary is beneficial because the money is saved before you even see it, obliging you to live within lesser means. Consequently, retirement savings begin without the nagging stress of financial constraints down the line.
Think of an effective strategy to direct your life towards the correct financial path in your twenties.
PUT A STOP TO YOUR STUDENT LOANS
If you’re a student loan debtor, strive hard to settle it as rapidly as possible. I managed to settle my loans within seven years of graduation, although it took longer than my initial five-year target as I didn’t anticipate them to be such a financial drain.
Carrying student loans into marriage can significantly hinder your financial ambitions as a couple. You may have to delay home ownership, forego certain holidays, and scrapping fun activities due to the looming burden of student loans.
Embrace sacrifices in the short term to avoid them in the future. The sooner you settle your loans, the easier it is, trust me on this.
EMBRACE SACRIFICES
Acceptance of sacrifices might need to become a part of your life. It’s okay to drive an old, inexpensive car if you can’t afford a new one. There’s no harm in living with your parents while saving money. Or work multiple jobs to speed up your student loan repayment.
Whatever the situation, ensure you make the necessary sacrifices today for a financially secure and debt-free tomorrow.
As a survivor of the tumultuous twenties, I’m curious to know about your paradigm shifts or hacks for managing the post-college years. Do you have any anecdotes or pointers on navigating through your twenties after college?
