People who are now in their twenties, starting in their career and concerned about where should they be financially. But really, in your twenties there is no need to stress. You should be worried more about building your foundation. What do we mean by this? Well, you should start with a savings account. You don’t want to have to rely on your credit card, right?
- Rule of thumb: Save 10% of yearly income and put it in a regular savings account where you have very easy access to that money.
- Rule of thumb: Then build an emergency fund. These are for the bigger things that could go wrong.
With all this being said, the nice thing about building a savings and emergency fund is that eventually it can be put into a ROTH IRA where this money can be accessed at any given time. The suggestion here is that the emergency fund be twice what the savings account is employed that 10% is good. If they are in business of themselves then they might want to double that amount both in the savings and emergency.
If they’re someone who is at risk of loosing their job then they may even want to consider upping it to around 40% or higher in case of an emergency. These are all some great things to be thinking about for people in there twenties! Remember it’s never too early to start thinking about your personal financing.