The Milford BankThe Milford BankThe Milford Bank

Three Things You Wish You Knew about Finance in Your 20s

Hindsight is an amazing thing, particularly in the world of finance. Take our word for it because we’ve lived through those years: There are a whole lot of things we know now about finance that we wish we did when we were in our 20s. But, like you, we were too busy getting our first jobs, moving into our first places and starting families of our own.
The world of finance is complex, and the list of advice we could give you could span volumes. But we figured to start small, so here are three things those in their 20s should take to heart right away:
1. It’s never too soon to start saving. Many people live paycheck to paycheck. While some have to, others don’t. The fact is you’ll never amass the kind of fortune you want if you don’t spend less than you bring in. Whether it’s choosing to cook dinner at home a few times more a week or waiting an extra year to upgrade your smartphone, make sure to put money into a savings account to build up a nice cushion. You can do that by moving in with your parents for a few years after college or at least living with roommates for a bit, too.

2. Start putting money in your 401(k) as soon as possible. When you get your first job out of college, retirement is probably the last thing on your mind. But if your employer offers a 401(k) plan, you should take advantage of it. Trust us. These retirements accounts are tax-deferred, meaning your pretax dollars are invested in mutual funds and grow accordingly over time. Sure, you’ll have to pay taxes when you withdraw from the account in retirement, but your money will grow significantly before then. What’s more, many employers offer matching plans, meaning they will contribute to your account in some fashion. Consider it a bonus of sorts.

3. There is something called compounding, and it’s a beautiful thing. Money that is invested grows over time. Consider this: If you were to open a Roth IRA investment account with the $5,000 your generous grandmother gave you on your college graduation day and you earned an average of eight percent on that investment each year, by the time you retired, the money will have grown to $154,000. If you were to wait to do the same thing on your 40th birthday, however, that money would grow into a little more than $34,000 by the time you turned 65.

You are now leaving The Milford Bank. You will be automatically redirected.

Links to third-party sites are provided for your convenience only. These sites are not within the control of The Milford Bank and may not follow the same privacy, security, or accessibility standards as The Milford Bank. The Milford Bank does not endorse or guarantee any offerings from the third party providers, nor is The Milford Bank responsible for the security, content or availability of any third-party sites, or their partners.

MESSAGE FROM TMB

It has come to our attention that some customers have received phishing phone calls claiming to be from “The Milford Bank Security Department.” Please remember: The Milford Bank will never ask you to share personal or confidential information. If something feels off, hang up and call us directly at (203) 783 5700.