Everybody needs to start paying attention to the details of his or her financial life. It’s the only way to avoid debt, build wealth, and start experiencing the kind of stability that comes from doing those first two things. But doing this is easier said than done. There are loads of challenges that come along with managing the details of a complex personal finance system. This article assumes that you’ve already started managing your debt, are budgeting, and have most of the earmarks of a fairly healthy personal finance life. If you haven’t done those things, this isn’t the article for you. But if you have, or you want to know what you should do next once you’ve mastered the basics, read on for some details.
Create Passive Income Streams.
This is one of the best ways to get on the right track financially. The old model or personal finance (from the 20th century and before) was for a person to do work and get paid, do work and get paid. It was an endless cycle, one that got more challenging as the worker got older or became ill. There have always been people who have broken from this cycle. American capitalism has outrageous examples of people who own whole industries. This likely will not be you. But that doesn’t mean you can’t take advantage of passive income. By buying a house to use for a rental income property, doing creative work for which you receive royalties, or building a business or web experience which can earn you money without you having to work directly for it, you can take advantage of this great way to make a living. There are a million ways to do this. Do your research about a sort that interests you to find out how to make it work for your life.
Watch Out for Automated Payments.
There are many subscriptions and automated payments that have a way of leeching off of the modern bank account. Take a look at your bank statements once a month to make sure that all of the payments you make can be identified. Then call the bank, or cancel the service/payment, as need be. For English readers, http://www.haveigotppi.org.uk/ is a helpful tool to find out if you have one of the most common autodraft issues anywhere in the world.
Create a Side Hustle.
Another good way to get yourself into a better financial situation is to simply make more money. If you can devote 15-20% of your free time to something that makes you money, and makes more money over time, allow this extra income to be fully devoted to getting you out of debt, putting into investments, or anything else that will pay off big time over time.
Life after graduation should be about working out some of the kinks in your financial system, and the sooner the better. If you manage to get things right in your 20’s, your financial life should be a lot smoother over the decades that follow, regardless of what career you choose.