How To Start Saving At 20 Years Old

For those who are just turning 20 or will be next year, you might be wondering what’s the next move in terms of saving money. If you’re going to school and have to pay out of pocket then student loans will be on your mind. If the workforce is the path then your mind will be thinking about how to save and not live paycheck to paycheck. Well you have clicked on the right blog post and today I will hopefully help with you with what to do next for saving money. Before I get into this, I have to display the disclaimer

I am not a financial advisor and all the advice I say in this post is based on only an opinion by me

Now that we got that out of the way, let’s get right into it.

The number one thing you need to have if you want to keep reading is money. Rather you get money from special holidays, doing chores, or working, The whole point of this post is to give some insight on what to do with it. 

1) Open a savings account

If you already have a savings and checking account with a bank already, good for you. The savings accounts i’m talking about is ones with good interest. Head over to this website and check out the estimates earnings for investing $1,000. If you don’t like the 1 year estimate ($20-$23) then look at it in another way. If you invested $1,000 dollars into a savings account, at 2.30 APY while contributing $100 a month to the account, then in 5 years you will an estimate of $7,486.10. I already know a lot of you are looking at this and thinking that there really isn’t any huge gains. While that is the truth, you are actually getting yourself in the habit of saving money. Just know the more you put in and the longer you wait will impact the savings a lot. 

2) CD’s

With certificate of deposits, you invest a certain amount of money that you cannot touch at all for 1-10 years. You can expect to earn higher interest rates then a savings account as your CD matures. If you invest $10,000 for 10 years at a 2.80% interest rate, then you will have a total of $3,231.16 interest earned. Both 1 & 2 are a way of long-term saving for your retirement and don’t come with big risk. 

3) Dividends 

If you don’t like savings accounts or CDs then maybe investing in stocks that pay dividends will be something you’re into. Dividends are basically money given to you every month for holding a company’s stock. Just take a look at this website here and see the top performing dividends. What a lot of people prefer to do is invest in ETFs that pay good dividends because your not just buying stocks for one company. ETFs track multiple companies and when they do well, the ETF does well. Overall, ETFs are a safe investment if you’re wanting to invest money into the stock market. 

Check out websites/apps like Robinhood, Acorns, and Stash if you’re looking to start investing. I encourage you to watch videos and reviews before going ahead and signing up for anything. Only get insight on what you’re going to do before attempting it.

I hope you enjoyed this short post on things a 20 year old should do in terms of saving money for their future. I’m working on getting The Finance Started a domain and looking more professional. The reason for writing on the free version is to see if anyone on the internet would be interested in a blog like this. If I get 10,000 visitors on this one post then it will for sure seal the deal. Make sure to share this with other young adults that want a little intro to saving money.