Your 20s are often seen as a true coming-of-age period when financial responsibility opens up the possibility of turning your dreams into reality. You’re settling into life after college, paying off debts, and starting to really define who you are as a person on your own in the world. But with bills, rent, keeping up social appearances, and other pressures, financial planning is often pushed to the side.

In today's modern world, you may need to take a different approach to your financial goals than previous generations. So where do you begin, and how can you stay on track despite all the pressures of adult life? Here are 4 tips that may help:

1.) Just Start

Excess cash that’s sitting around is begging to be spent on impulse purchases. Instead, putting extra money aside to save and invest - even just a little bit at a time - can really add up over the long run. Assess where you can minimize expenses to free up money that can be put to work to grow for your future. Set a long-term savings or investment goal based on your current income and goals and adjust from there as your circumstances change. The important thing is to just get started as soon as possible. When you're young, time is on your side, so don't waste it!

2.) Set Long-Term & Short-Term Goals

Being able to start saving for retirement in your 20s can be beneficial, but it doesn’t have to be the be-all-end-all. You may also want to set money aside for your shorter-term goals, like paying off student loans, saving for a down payment, starting a family, or traveling. Once you’ve identified your goals, you can build a plan to save for the long-term while still giving yourself the freedom to enjoy life in the moment.

And as for retirement planning, see if your company has a sponsored 401(k) program or another retirement plan, and try to contribute an amount that will allow you to take advantage of any potential employer match. Outside of that, look for opportunities to contribute to a tax-advantaged plan that will help offset potential taxes in the future. A Roth IRA can be a great option, but it may not always be available once your income increases past a certain point, so it may be wise to take advantage of this option while you can.

3.) Consider Diversifying Your Portfolio

It’s generally believed that attaching yourself to individual company stocks opens you up for risk. Spreading your investments across different asset classes and funds may lessen the impact market volatility can have on your early investments. Even though you may have time for your retirement portfolio to recover before your retirement years, this doesn't mean you want to have all your money in high-risk buckets, or risk losing more than you should. Diversification can help stabilize your overall portfolio, although you should keep in mind that diversification does not ensure profits or protect against losses in declining markets.

4.) Continue to Educate Yourself

The world of finance can be intimidating. But by educating yourself, both on your own and by consulting with a knowledgeable financial professional, you can build your understanding of financial terms and concepts and keep yourself informed. Learning to manage money is a skill that will benefit you throughout your entire lifetime, so it's worth investing a little time to improve your financial knowledge on an ongoing basis.

Want help getting started on planning for your financial future? Reach out to our office for a free initial strategy session! Or download our free Modern Wealth Guide for young professionals here.

^{This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2024 Advisor Websites.}