Top tips from experts for young people to improve their finances

This article was originally published in English

According to the Hargreaves Lansdown Savings and Resilience Barometer, it is estimated that 30% of young people aged between 20 and 24 They have savings “just in case”and this figure rises to 53% in the case of young people between 25 and 29 years old.

This is so despite the fact that Twenty-somethings only have about €12 (£10) a month of their income left to savewhile those who have Between 25 and 29 years old have about 95 euros (81 pounds) per monthEmma Wall, head of investment research and analysis at Hargreaves Lansdown, explained to ‘Euronews’.

However, creating a financial plan may seem intimidating at a young age, but it is possible.

Plan ahead for the future

Behavioral economics is a term worth knowing. It refers to what comes into play when you make financial decisions. For example, it suggests that you are much more likely to Most people gravitate toward their current needs rather than focusing on future needs.how to invest for retirement.

Hargreaves Lansdown’s personal finance manager Sarah Coles says: “Don’t be afraid. With a little planning, you don’t have to sacrifice everything for your future. In your 20s, you have time on your side and the power of compound interest that you can take advantage of.”

Essentially, this means allowing time for your money to grow.

Coles also noted that it is important carefully evaluate any investmentas they all involve risks and there is no promise of high returns.

Historically, returns on investments are better than those on cash deposits. However, savings accounts They are also necessary for short-term goals, such as vacations or unexpected bills.

Coles also emphasizes the importance of having enough cash to cover at least three months of essential expensesin other words, having enough money set aside to stay afloat in times of financial trouble.

“Domiciliating your payroll means not having to remember to prioritize financial health each month. Most platforms allow you to establish a regular investment plan from just €28 (£25) a month,” adds Sarah Coles.

What investments should 20-somethings look for?

If you are at the beginning of your investment journey, it can be difficult to identify where to start. A vital component of the investment process is Learn about the different types of investments and what best fits your financial goals and current circumstances.

When you cross the 20 yearsyou are in an accumulation phase: you are getting money from investments and paying for them, rather than relying on them for retirement income. That said, you have a long-term opportunitywhich means you have time to build your financial portfolio, which essentially consists of a collection of all your financial assets, such as bonds, stocks, shares and commodities.

Emma Wall, of ‘Hargreaves Lansdown’, thinks that “andBetween 80 and 100% of your portfolio should be in equitieswith about half of this allocation in US stocks, another 10% in UK stocks, 10% in Europe, 5% in Japan and the remainder in emerging markets.”

Another option suggested by Emma Wall could be buy a single fund that is a combination of cash, stocks and bonds in a single investment.

Current investment trends for 20-somethings

With constant technological innovation and the Growth of ‘finfluencers’ On social media platforms, many young people find it much easier to access financial information and investment opportunities.

According to an opinion survey of 2,000 people for ‘Hargreaves Lansdown’, around 21% of investors aged between 18 and 34 receive market forecasts and Instagram stock advice16% lean toward Facebook looking for financial advice, 14% were inspired by Reddit and 8% resorted to TikTok.

According to Naeem Aslam, chief investment officer at Zaye Capital Markets: “While Generation Z may believe that there are numerous free and open resources at their disposal to obtain useful information for their investment decisions, which is often in line with reality, It is crucial to recognize that experience is the most valuable factor“.

“What we mean by this is that a financial advisorhaving seen similar situations before, would have better experience in investing, diversifying the available capital and producing a significantly higher return.”

In essence, seeking out financial information at any age is a good idea, but be sure to treat it with caution, especially if it comes from unregulated sources, where you will have no protection if something goes wrong. It is also important toAllow time to verify information or conduct additional research about any new ideas you have discovered. It is always best to consult with a financial professional before making any hasty decisions.

Please note that the information contained in this article does not constitute financial advice – always do your own research to ensure it is appropriate for your specific circumstances. Please also remember that we are a journalistic website and our aim is to provide the best guides, tips and expert advice. If you rely on the information on this page, you do so at your own risk.