![Women's Money Week 2012 Participant](http://womensmoneyweek.com/images/wmw-2012.png)
I am participating in the first annual Women’s Money Week, a project to empower women to take control of their finances. Today's topic is Money in your Twenties/Thirties/Forties/Fifties/Retirement. Check out the Women's Money Week 2012 website for more posts from some amazing Women Money Bloggers!
For some this period may
represent your glory days while others may refer to it as a Quarter Life
Crisis, but your 20s is a time of amazing transformation. The bridge connecting
adolescence and adulthood, your 20s may bring your first (full-time) job, first
love, first major purchase (ex- a new car), and first experience with recurring
bills (student loans anyone?). With all
these “firsts,” it is important to make sure you are making smart choices and
creating good habits to carry you through the rest of your life…ESPECIALLY when
it comes to your finances. Here are a few things that I believe everyone
should know about money before leaving your 20s to put you on the path to
financial security:
How to create a budget.
You have probably heard this
before, but the budget is one of the basic principles of personal finance. For
some, this may be your first experience making enough money to actually support
yourself. In order to manage this new
fortune, you need to keep track of the money you have coming in (income), the
money you have going out (expenses), and make sure that your income is always
greater than your expenses.
Avoid the credit trap!
When I was in college, there were credit card companies all
over the campus offering free t-shirts, mugs, etc. just for signing up. In that setting I was eager to sign up for my first
credit card, but luckily I refrained from actually using the card for over a
year and truly considered it a tool to be used for emergencies (and the
occasional tattoo—don’t judge me lol). Your
20s is a time for establishing and building your credit. Because you probably
have little to no credit already, you probably won’t have the best credit rates,
so spending recklessly on your card and carrying a credit card balance from
month to month means that you may face hefty interest charges. That spring wardrobe you caught on sale might
not be that good of a deal if you buy it on credit and have to pay an extra
10-20% over the course of a year. Also,
don’t mess up your credit early by applying for a lot of different credit
cards, maxing out card, and missing payments. Not only do these immediately hurt your credit
score (which would affect your future interest rates on home/auto loans), but
they create bad financial habits that become more and more difficult to break.