Being a “20-something” nowadays can feel like you’re a kid trapped in an adult’s body. Many of us are delaying adulthood and putting off things like marriage, children, mortgages, and other daunting life experiences — all for the sake of stretching out our freedom years as long as we can. As much as we may want to delay the future, there is actually some good in thinking about it now. Time flies quickly and a lack of pre-planning can have dire consequences.
If you’re the kind of 20-something who still eats ramen for dinner, parties every weekend, and is stuck at a dead-end job because you can’t see the future beyond Friday night, maybe it’s time to re-evaluate priorities and start considering making some investments for the future. Below are five examples of worthwhile investments for when you finally do grow up:
1) A 401k, or any type of retirement plan. It’s easy to scoff at the idea of saving for retirement when it seems like fifty [billion] years away, but honestly, the best time to start is now. Social Security is drying up faster than a puddle in the Sahara, and it’s almost guaranteed that our generation will never receive it. Save now so you can have that proverbial comfy nest for when you stop working. A 401(k) is the most ideal; it’s untaxed income that your employer can match. There is a significant difference between starting your savings now and when you’re twenty–probably tens of thousands of difference.
2) Paying off student loans. We all know these are the pains of many 20-something graduates’ souls. Sallie Mae has most of us hanging from our lady parts. But it’s definitely better to get these out of the way and paid off sooner than later before the interest goes up and you’re swimming in that murky, hopeless sea of debt. These should definitely take priority over any unnecessary financial splurges–you can buy cute shoes and purses after you climb out of this miserable hole, and you won’t have to experience any of the regret or shame. Also, look into these loan forgiveness programs to find out how you can quickly zero out that debt.
3) Real estate. If investing in stocks and bonds sounds too complicated right now (and you’re too broke to hire a broker), then the next best investment to make to bring in additional money is real estate. After buying property, as a landlord, you would charge tenants all the necessary costs to pay off the property and the mortgage; when that’s paid off, all the incoming money afterward would become profit. However, there are a lot of risks that come with this investment so you should perhaps consult with a real estate agent or someone who has knowledge and experience in this field.
4) 3-6 months of living expenses. Life has a way of throwing curveballs and home runs smack in our faces when you least expect it. You never know what will happen in such an uncertain economy and how secure your situation is. It is best to have at least 3-6 months of living expenses tucked away so you at least have a chance to not strike out completely. Even if you’re unfortunate to never have to tap into it, you could always save it and use it in another valuable way: put it in your retirement fund or invest it in tip #3.
5) Yourself. In her amazing Ted Talk “Why 30 is Not the New 20″, Meg Jay’s advice is to “forget about having an identity crisis and get some identity capital… Do something that adds value to who you are. Do something that’s an investment in who you might want to be next.” Don’t waste your life on Facebook, or your phone, or partying without solid plans for the future. Invest in you. Invest in your health by making nutritious choices instead of cramming fast food into your body. Invest in your mind by spending an hour reading instead of playing video games. Invest in your relationships by spending time with your loved ones. Learn a new skill or follow your passions on the side. You are the most important investment you can make, and the best time to start is now.
