What five decisions have the greatest impact on the lifestyle of people in the twenty-something age bracket? It turns out there are actually dozens of choices young adults make that can literally change the course of their lives, but several stand out as being especially crucial. One reason the 20 to 30-year-old demographic is so pivotal is that even apparently insignificant actions are magnified by time. For example, a 22-year-old who sets aside just $100 per month at a three-percent interest rate would accumulate more than $105,000 by retirement at age 65. But, it’s not all about money. Here are more facts and figures about the most important decisions young working adults make before their 30th birthday rolls around.
First Jobs
Choosing the first job within your career field is a critical moment in so many ways. It takes time and effort to identify worthwhile employers who offer pathways for advancement, competitive benefits packages, and the chance to acquire new skills. Consider hiring a licensed vocational counselor for one or more consultation sessions to hone in on how to land that first position.
Graduate Degrees
Earning a graduate degree in your chosen field of work can significantly increase immediate and lifelong earning potential. That’s because hiring managers are always in search of candidates who have taken the extra step of adding a master’s diploma to their resume. How to pay for this income boosting credential? A wise plan is to apply for student loans through a private lender to cover all expenses of advanced education. Private lenders offer repayment flexibility and loan terms that government organizations just can’t match.
Marriage Plans
In the 2020s, millions of young people are choosing to delay marriage for the sake of building a solid career. Take the time to assess you own situation and see if waiting until after age 30 might be a good way to focus on financial stability first and planning for married life later on. The guideline for this age group is there’s no rush. From an emotional standpoint, the ugly side of divorce has also discouraged young people from marrying before their 30’s.
Retirement Goals
If you don’t have the financial skills to make a detailed retirement plan, hire someone to help you, like a CPA (certified public accountant) or CFP (certified financial planner). Don’t worry if you have limited funds. The point is to make a plan and set long-term goals for retirement, not to get rich as quickly as possible. With four decades of a career in front of you, the idea is to contribute regularly to a formal retirement account and to begin doing so as soon as possible.
Spending and Saving Habits
Building early savings habits make a huge difference in long-term financial security and retirement lifestyles. But keeping an eye on spending habits is just as vital. Younger adults should be especially diligent when it comes to making monthly budgets and setting annual spending limits. Working with a professional planner is one of the most effective ways to get a handle on spending and saving. Everyone, not just 20-somethings, should consider earmarking a fixed percentage of every paycheck for a savings or retirement account. Likewise, they should also develop realistic monthly budgets that include emergency fund set asides, money for everyday bills, and tax obligations.
