Are you making the right moves with your money in your 20s?
A little while back I wrote about 30 financial moves you should make before 30 over on another blog. After reading through the comments, receiving further feedback and little more thought,
I wanted to narrow this list down to the top 20 financial moves that you should make in your 20s:
1. Pay off all debt.
While you can argue that there is a distinction between good debt and bad debt (education vs credit card), you should strive to pay off all of your debt before you hit 30. If you pick up a mortgage then this might make your goal of being debt free a little more challenging. However, it’s still possible to pay down your debt.
2. Travel the world.
Traveling has become another frivolous purchase that we expense on our credit cards. It doesn’t have to be. You can use your lack of real responsibilities in your 20s as an excuse to take off for a bit and see a part of the world that interests you. If you save up in advance and eliminate crap from your life, this goal will become possible financially quicker than you may think. You too can travel the world in your 20s.
3. Make $10,000 with your own side business.
You don’t have to be an entrepreneur and you definitely don’t need to build the next Google. However, with a little hustle and sleepless nights you can hit the point where your side business generates $10,000 a year. If not on an annual basis, you should still try to hit the $10,000 earned on your own mark before you hit 30. You can easily find a freelance writing gig.
4. Quit a job.
Life’s too short to work a job that you hate. Working a job that you despise to pay off unnecessary bills will only cause you to feel depressed. Quitting a job you hate goes hand in hand with improving your money management skills. Don’t become another victim of consumerism.
5. Get a promotion.
Move your way up in the company. Find a way to perform your job better than others and hopefully you’ll earn yourself a promotion.
6. Earn a raise.
Become indispensable and improve your financial situation by simply making more money at your current job.
7. Make an investment mistake and learn from it.
Investment mistakes will happen. You can stay on the safe side and try to avoid them at all costs– or you can accept reality and understand that you will make mistakes. Learn from your mistakes and try not to repeat them. Also try to share your mistakes with others and try learning from your peers.
8. Help out a friend in financial trouble.
As you learn how to manage your money better and pay off your debt, you can turn around and help a friend in financial trouble. You can either loan money or supply with them with something that they need (a place to stay perhaps?).
9. Donate money.
Donating money is underrated. I personally am not a fan of mega charities where there’s a hierarchy of individuals earning more money than me working for the charity. I do however believe in helping others. Any way that you can help others is a positive.
10. Fund your retirement accounts.
It’s never too early to start planning for your retirement. Start funding your retirement accounts with your first job and take advantage of any opportunities that are offered by your employer.
11. Set a target retirement date.
Sit down with your financial advisor (or do it on your own) and figure out a rough time line for when you can retire comfortably. This is clearly a rough number, but it keeps you focused on your goals.
12. Don’t let the economy be an excuse.
Learn to stop blaming the economy for everything and take accountability for your money. It’s far too easy to blame the economy or any other external situation. You are responsible for your money. Nobody else.
13. Make a $1,000 by selling your crap.
I’m slowly working on this one now. By the time you hit 30 you should’ve sold $1,000 worth of clutter sitting around your place that you don’t need any more.
14. Buy a used car.
Save money by purchasing a used car instead of trying to upstage your friends by picking up the nicest car you can find and going into debt with car payments.
15. Pay your parents back.
As you start making money money and your financial situation improves, you can finally pay your parents back. You know, for letting you live for free all of those years and any other money they may have given you. You don’t have to pay them back with cash. Sending them on a trip or helping out around the house can go a long way as your parents age.
16. Negotiate a savings of $5,000.
It doesn’t matter how or where you do this, but you should aim to save five grand by negotiating down prices through your 20s. This can be in any area of your life: car insurance, vacation, services, or buying a car.
17. Move out.
This should be obvious but you need to do your best to move out before you hit the big 3-0. This doesn’t mean that you need to buy your own home or get married. You can start off by renting a bachelor pad by yourself.
18. Start a college savings plan.
You don’t need to have kids at the moment. Unless you’re strongly against the idea of kids, chances are that you’ll eventually have kids. Start planning for their college education now so that they don’t have to drown in debt with college loans.
19. Save for your wedding.
Most single 20-something males don’t plan on ever getting married. I certainly never think about it. The funny thing is that most people that we know end up getting married! Some do it earlier than others (20s), and then some hold out until the very end (40s). It likely will happen. Oh and your plans for a small wedding will go out the window when your future-wife puts the pressure on. Just like with retirement, you can never start planning too early.
20. Spoil yourself.
You don’t have to save every single penny. You can spoil yourself once in a while! Take a trip, buy that expensive pair of shoes, or go for that massage. If you take care of your money it doesn’t hurt to spoil yourself once in a while
These were the most worth while money management tips that I could think of for your 20s. Did I miss any?