What financial planning should I do right now as a 20 year old that will help me live comfortably by my late 20s?

This question and answer originally appeared at Quora.

Hello Mika, I would second Ted’s comments and ideas but with two additions/alterations based on your goal to be financially comfortable in less than 10 years:

  1. You have to spend considerably less than you earn (realistically you have save 50% of your income), and you will have to invest the difference (in yourself, in your own business and in other businesses via shares – so you should learn about these subjects).
  2. You have to strive to earn more money. You will struggle to be financially comfortable by your late twenties if you only earn average income – it will be easier to save half your income if you earn more. That is easier said than done – but you need to set ambitious goals (it helps to visualise them) and you will need the focus of working towards them every day – but remember the importance of using Sunday to rest.
  3. Keep track of your progress. You will find it helpful to note down where you are today (income, assets, debts, skills etc.) and then you can look back at how you have progressed each year.

Finally I would say that whilst it is sensible to focus on becoming financially comfortable and wealthier, remember to remain content with what you have and the efforts you make (celebrate the small successes along the way), and also remember that you are already more financially comfortable than the vast majority of people on the planet.

Give due attention to your finances, but don’t let that stray into worrying too much about money at the expense of living a fulfilled life.

I hope that helps.

This answer first appeared here.

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Mark Underdown

Financial Planner, Small Acorn Money

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