In her book, veteran psychologist Meg Jay, Ph.D., said that most young adults in their 20s believe that their current spending habits will not affect them in later life. However, the author of the book ‘The Defining Decade’ said that young adults need to be wary of their spending, lifestyle and savings as it’s the most crucial time of their life, leaving many in debt that they will continue to pay into their senior years.

“The foundation you build in your 20s will define the rest of your life – take yourself seriously,” Jay said.

The earlier you start following better spending and money saving habits, the sooner you will become wiser and more prudent with your hard-earned money to help your future self. In this post, we will highlight some effective ways on how to enjoy a debt-free life as early as today.

Avoid debts at all cost.

A series of debts is the most common dilemma many young adults get themselves into, where they end up paying old debts through new credit cards. This tends to be a common problem among credit card owners, and results in a never-ending cycle. According to Forbes, as many as 30% of Millennials are now struggling to pay debts. The best way is to clear credit card bills and student loans, is to try and clear them all gradually by reducing your spending habits. Upon clearing them begin saving for your retirement and get into a habit of not splurging on unnecessary things.

Learn to invest.

The most common mistake of Millennials when it comes to investing is by placing money on investments with low returns on investment (ROI). These investments are commonly those that provide short-term rewards or happiness, such as a new smartphone, a new car, and other unnecessary things that aren’t essential to our daily lives. These possessions also tend to depreciate in value quickly and don’t allow for a return upon selling them.

So what investments are worth considering? One great investment is sorting out a retirement plan. The earlier you commit to investing money in your retirement plan, the faster you will be able to achieve your early retirement without problems. Unfortunately, this isn’t the case with most young adults today, as CNBC revealed that Millennials tend to make unrealistic retirement plans and don’t care much about their future financial status.

Another way to keep the money flowing is through forex trading. In a post by FXCM, they stated Millennials have all the qualities to be successful in forex trading. The article discusses that most young adults in their 20s accumulate substantial debt, as many of them have taken out student loans. However, Millennials are found to have an entrepreneurial spirit, risk aversion, conservative trading strategies, technological knowledge and time and patience, all of which can help them in making well-informed judgments regarding their investments.

Be mindful of your expenses and spending habits.

It’s the most straight to the point piece of advice you take from this article. We understand the feeling of excitement of receiving your salary after working extremely hard for it, but it’s important to curtail those urges to spend on things you don’t need.

The best way to counter this is by organizing your cash flow by designating a certain percentage to your savings. An article by Jennifer Eum said that at least 10% of your salary every month should be placed in your savings. This should be enough to help you retire comfortably. All you need to do is stick to your budget, avoid overspending on unnecessary items, and organize your cash flow.

Starting early in your journey to a debt-free life can be highly advantageous for your future. You will be thankful later on that you followed the suggestions in this list as it will help you to live a stress-free life away from the possibilities of being weighed down by financial burden.

About the Author

Writing about financial advice has become something of a passion for Lianne Good over the last couple of years. However, she has a day job, too and, well, a life away from advising people how to safeguard their futures. Lianne also enjoys yoga and reading horror novels.