I think everyone can agree that your twenties are difficult. When you are fresh out of college, adjusting to the 9-5 grind can be hard, and then in your mid-twenties competition in your career can become fierce, you may get married and have a kid.
Once you are on the carousel it never stops, but my point is that most of your twenties will be spent in flux. This doesn’t mean your finances have to be, which is why I’ve compiled the most important financial rules for those in their twenties.
1. Live like a college kid for as long as possible —The transformation from poor college kid to working adult with an income can be a dangerous one. After all, you’ve lived off of ramen noodles for four years. Still, depending on the industry you work in, your starting salary may not go as far as you think. Even if it is just for a year or two try living like a college kid. The money you’ll save with put you ahead and pay off those student loans even faster.
2. Put your credit cards on ice —You don’t actually have to freeze your credit cards (even though I do) but laying off of the credit cards in your twenties could save you big down the road. And having some credit on the cards will come in handy later in the event you have an emergency and are still building your savings. Credit should be used wisely, but it is easy to fall into the trap of using a credit card once you are making money every month to “pay it off.” Most of the time people rarely do.
3. Adjust your expectations —This may seem like odd advice in a financial article, but working a terrible, soul-crushing job in your twenties is almost a rite of passage. If you adjust your expectations, you’ll be able to see that every job is a stepping stone, no matter how terrible. Use the income to pay down debt, save up to start your own business, or take classes if you are still figuring out what it is you want to do. A job is better than no job.
4. Save early, save often —I won’t lie to you. It is difficult to accumulate savings. Especially when you are just starting out; you have insurance costs, furnishing your apartment/home or saving for a wedding to contend with. Still, the earlier you start saving, even if it just a tiny amount, can set you up for financial success down the road. Having an “emergency fund” keeps financial disasters at bay, and is the single most important key to financial stability. After all, living paycheck to paycheck in your 30’s just isn’t cool.
5. Share your journey with someone —Those who are married already have access to the single greatest benefit of joining finances: having someone to keep you accountable. Even though couples share both two incomes and two sets of financial baggage, they have a financial buddy built-in to their home life. Not married? No problem. Share your journey with a close friend, mentor, or parent. Having someone to bounce ideas and “talk money” with on a regular basis will keep you accountable for your financial goals in the long term.
What financial lessons from your twenties do you think are the most important? What would you have done differently?
Author Bio: Lauren Bowling is the blogger and editor behind L Bee and the Money Tree, a personal finance site that explores the link between finances, lifestyle and self-esteem. She works full time as a marketing professional in Atlanta, and in her spare time as a freelance writer whose work and financial advice has been featured on Yahoo! Finance, Money Talks News, AOL’s Daily Finance, and Credit.com