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10 Things I Wish I Knew about Finance in My 20’s

Your 20s can be an amazing time. You’re young, full of ambition, and probably don’t have too much responsibility to worry about just yet. However, despite all the freedom you can enjoy during this early stage of your life, it’s important to remember that there are financial concerns to consider if you want to prepare for a successful future.

While we all like to tell ourselves that we’re financially savvy, the truth is that none of us really want to admit that we can all be a little careless with our money. Since cash is crucial to just about everything you do, it’s time to make sure that you know these 10 finance facts, that could help you to get more out of your 20s.

1.     Anyone Can Invest

A lot of people believe that only people who have huge amounts of money can afford to invest in mutual funds and stocks. In fact, some studies suggest that only one in three millennials bother with investments. Although you might not get rich overnight on the stock market during your 20s, you can still invest if you don’t have much extra income.

Investing your money - Finance

2.     It’s Easy to Get into Debt (But Not to Get Out)

We all know that getting into debt is a piece of cake – unfortunately, getting out of a financial hole isn’t quite as simple. Even paying off a small amount of debt can take years thanks to things like interest and APR. In other words, getting into debt is expensive. Before you purchase anything, you should think carefully about what you’re getting yourself into.

3.     Know How to Use Your Credit Card

Credit cards can seem like incredible things. You get to spend all the money you want – without actually having that cash in your checking account. However, the truth is that you shouldn’t be using your credit card for everything from gas, to entertainment, and clothes. While using your card is a good way to build your credit score, it’s important to make sure that you’re using a budget and sticking to it carefully.

4.     Make Sure You Have Savings

About 72% of Millennials have less than £1,000 in rainy-day savings. That’s pretty worrying when you consider how quickly that money can be used in the event of a disaster. To make sure you’re prepared for the worst, try setting aside a little money from every paycheck that you can rely on as a safety blanket when things go wrong.

a coin being put into a piggy bank

5.     Tell Credit Bureaus about Your Rent

According to experts, almost every major credit bureau will allow you to report your rental information. While less than 1 percent of all files in credit agencies contain rental information, sharing yours could help you to improve your credit score dramatically.

6.     Try to Build Your Credit

Your credit score is your golden ticket to financial freedom as an adult, so make sure you use it however you can. There are plenty of ways that you can build your credit, including using credit cards and setting up direct debits. It’s never too early to think about improving your score.

7.     Avoid Predatory Loans

Predatory loans might seem like the only option in a dangerous situation, but they can often destroy your financial status. With the average interest rate for these loans measuring at about 400%, you’ll find yourself struggling to pay back even the smallest of loans. Exhaust all of your other resources before you take this route.

8.     Stop Inquiring

A lot of people don’t realize that credit inquiries can easily damage their credit score, docking huge numbers off your overall rating. The rule of thumb to keeping your score safe is to shop around when it comes to purchasing something that you need to get on credit. Don’t inquire until you’re certain.

9.     Don’t Buy a Car Immediately

Even if you can afford to buy a car this minute, that doesn’t mean that it’s the right investment for you. Cars are depreciating assets which begin to lose their value the minute you get behind the wheel. At the same time, unexpected maintenance and expenses are going to cost you over time. Think carefully about whether you really need a car before handing over your money.

car steering wheel adult learner driver

10. Cut the Social Spend

Finally, while it’s tempting to spend lots of money on going out and having fun with your friends while you’re still young, try not to go too wild. Cutting back on your spending is a great way to save money for the things that really matter in the long run.

This is a collaborative post

Would You Want A Mobile Wallet or Purse?

Mobile Wallet

I had to buy a new purse recently. My old one was getting too small for all the bank/credit/store loyalty cards and receipts I have. I was a bit sad because my old purse was a birthday present from my step-daughter. When I added it to my Amazon wishlist, I didn’t even consider the size, I just loved the design!
I recently read an article about a mobile wallet (or purse if you prefer!) that intrigued me. At first glance, I think they’re an excellent idea.

Mobile Wallet
Image courtesy of FreeDigitalPhotos and Supertrooper

It would be great to have all 17 of the assorted cards I have in my purse, stored on my phone. My Donor card could be stored in there and linked to the National Organ Donor Register.
Receipts could be sent straight to your phone. No more tearing around the house trying to find the one you need to return something that broke 2 days after purchase!

You could have your driving license stored on your phone. You’ll have a form of identification with you all the time (as long as you don’t often forget your phone. Like me!).
Digital gift cards could be in your digital wallet. Physical ones can get lost or accidently donated to the charity shop. It does happen! I volunteer in a charity shop and I found a £25 gift card in a book that had been donated a few weeks ago. We’ve put it in the safe but it’s unlikely the person will remember it was in the book in the first place.

Going cashless

You could even have digital versions of things like concert tickets and bus passes stored in your mobile wallet. When you think about it, the things that could be kept in your digital wallet seem endless.

Now I’m not that tech minded. I’ve only read a little about them so I’m not sure if all the above is possible yet. I do know that we are moving ever closer to a cashless future. The question is, are we, as consumers, going to adopt the technology?
Apple pay has been around since 2014 but surveys have shown that only 6% of U.S. mobile users eligible to use Apple pay have done so.

One of the main things that I can think of that’s not so good about having a cashless future is not the security, it’s overspending. If I’m shopping with notes and coins in my purse, I’m more aware of how much I’m spending.
When I’m shopping with a card, it doesn’t seem to register that I’ve actually spent money!

If you want to read more about new payment technologies check out this post by UK Credit and their Money Life magazine

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