Money Goals for your 20s: Having Fun While Funding the Future

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Money woes can lead to stress in other areas of life, not just your wallet. In the first installment of a three-part series on financial fitness during various ages and stages of one’s Navy career, guest blogger Stacy Livingstone-Hoyte, AFC, provides Sailors in their 20s with a few self-care tips to get a head start on achieving financial freedom. –NavyNavStress Note

Being in the Navy in your twenties can be an adventure. You may feel a growing sense of personal freedom as you gain traction in your career, learn new skills and see new parts of the world. And then there’s the growing sense of financial freedom thanks to consistent income, specialty pay, inexpensive quality healthcare, discounts, allowances, quality of life resources and more. These are all important benefits that can help you achieve a solid financial foundation early-on in your military career—but can easily be squandered if not approached with the right mindset and actions.

So what is the “right mindset” when handling finances as an independent twenty-something-year-old Sailor? The first step is to learn how to live within your means and enjoy the present, while keeping an eye on the future. Take a moment to imagine yourself in five to ten years and visualize some milestones you’d like to achieve, such as purchasing your first car or home, career advancement or starting a family. Write down specific traits of your mental image of these milestones—perhaps describing what your first home may look like in your mind’s eye—noting what’s most important to you, what’s most satisfying about each milestone and why they’re worth working towards. Then post your notes in a place where you can easily see them. By visualizing, capturing and revisiting these mental images, you can practice keeping your goals in sight when making every day and long-term decisions that may impact your financial present and future.

Here are a few additional tips to give yourself a solid financial foundation in your twenties:

  1. Set Up an Emergency Fund. It’s easy to feel invincible when you’re earning your own money and have achieved some independence—until something unexpected comes along that you weren’t prepared for, like expensive car repairs. That’s why it’s important to build an emergency fund. Even if your income is limited and saving the ideal three-to-six-months’ worth of living expenses seems daunting, you can still approach this step with positivity and optimism. The key is to get started and allocate a percentage of your pay that you can reasonably contribute, working toward an initial goal that you believe is attainable (such as $500 or $1,000). Boost your savings any time you receive bonus pay, salary increases or unexpected financial gifts.
  2. Make it a Habit. Determine a set monthly budget based on your recurring expenses (rent, auto-insurance, utilities, etc.), savings goals (including emergency fund and retirement), and discretionary income (remaining funds that you may spend on groceries, gas, entertainment, etc.). Automate deposits to meet these savings goals to reduce the likelihood of overspending and under-saving. Then consider going cash or debit-only for your discretionary spending, determining a reasonable fixed dollar amount for the month and dividing it into weekly or bi-weekly allowances. You may find that when you work toward sticking to a set number, you’re able to adjust your “wants and needs” accordingly and stay within a budget that allows you to have fun while funding the future.
  3. Think it Through! Whether you’re shopping for your first big purchase such as a new or newer car, or are struck by an impulsive urge to treat yourself to some new tech at the NEX, take a moment to consider your future goals. Ask yourself how the purchase you’re presently exploring will impact achieving those milestones. Maybe you opt for a pre-owned car in good condition and under warranty, offering a lower monthly payment and allowing you to save toward your goals. Check out these calculators to help you get a grip on your financial picture before making a money decision.

Enjoy your twenties, recognizing that progress and setbacks are all a part of the journey. Open yourself to the stories and experiences of others to help you stay on track and maintain a positive outlook, seeking sound advice from mentors and professional resources when you’re in unfamiliar territory. For additional tips, check out the resources below:

Stacy Livingstone-Hoyte, AFC is an experienced financial counselor and regular contributor to the Every Sailor, Every Day campaign. Read more of her tips and tricks to spend and stress less on the NavyNavStress blog.

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