Learning financial responsibility in your twenties can be a total game changer for your future. By getting the following six lessons before you turn thirty, you can set yourself up for more financial freedom and peace later in life.
1. Get a side hustle now. Seriously, while you still have the energy and time, get a side hustle. Not only will you save some coin by not spending every evening at happy hour after work, but you will also be earning some cash during that time.
2. Every dollar has a place. In other words, get a budget! Create a budget and assign every dollar to a category. If you have money left over you will spend it on dumb stuff, instead allocate it towards financial goals so you aren’t tempted to waste in on yet another one of Kylie’s lip packs.
3. Set financial goals. Whether they are paying off debt by a certain deadline, saving for a retirement or a home, start thinking about your financial future.
4. Make saving for retirement a necessity. To the previous point, if you are debt free, then saving for retirement via an IRA or 401k should be a fixed cost in your budget. The younger you start saving the more of the compounding interest you can rack in. Plus did you know it’s nearly impossible for someone who started saving for retirement at age 30 to catch up to someone who started saving for retirement at age 20?
5. Building credit takes time, destroying credit takes minutes. Seriously, every time you open a retail card for 20% off hurts your credit. Then factor in the fact that most Americans are living in financial chaos, (for example: forgetting to pay the bill on that retail card), and it has the potential to hurt you even more!
A good rule of thumb if:
– your new to credit (as in just started using it in the last 6 years) or
-if you don’t have an emergency fund with six to nine months of income in it, or
-if you have had a checkered past with credit
is to only charge what you can pay off in 24 hours.
6. Live below your means. In your twenties you will probably make some nice jumps in your career, which come with nice salary boosts. You should use that as an opportunity to live below your means, rather than fall into the trap of lifestyle inflation to match your new paycheck. Remember, just because your co-worker come in with new designer shoes every week, does not mean they don’t have a buttload of debt they are paying off. Dave Ramsey says you have to “live like no one else today, so you can live like no one else tomorrow”… meaning that most Americans are in debt, and if we live below our means when we are young, we don’t have to be tied by debt in our future.
tcmdisqus 
May 18, 2016 at 12:55 am
Love these – couldn’t agree more!
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May 20, 2016 at 2:12 am
Thanks Rachel!
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May 18, 2016 at 1:38 am
Excellent tips! I needed to read this!
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May 20, 2016 at 2:11 am
Thank you Christina!!
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May 18, 2016 at 5:34 pm
These are all really great tips! I just got a job (after college) and I can’t wait to start saving money and building my credit!
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May 20, 2016 at 2:11 am
Yay! Congrats Cole!
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May 18, 2016 at 6:04 pm
All great tips!!! I budget down to every dollar almost. I know that I have bills to pay and if that means not having something that I don’t really need, it’s cut out. Also having a side hustle is something I’ve done.
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May 20, 2016 at 2:11 am
Thanks Mistle! I love side hustles! Especially while we are young and still have the energy and flexibility!
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May 19, 2016 at 8:39 pm
Amazing tips. Me & boyfriend have been coming up with ways that we can save money. I think living below your means is defintely one we need to work on.
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May 20, 2016 at 2:10 am
Thank Jazmine! You guys can totally do it! Maybe even set up automatic direct deposit where a percentage of your paycheck goes straight to savings so it’s totally out of site out of mind! Good luck!
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May 20, 2016 at 11:58 am
"Building credit takes time, destroying credit takes minutes" – so spot on! It’s also so important to keep an eye on your credit report even if you think you’re doing a good job at managing your finances. Small dings to your credit can still have a huge impact.
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May 20, 2016 at 9:52 pm
So true! A recent hard inquiry dropped me by like 20 points!
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May 21, 2016 at 4:01 pm
These are all such great tips for young people starting out. My husband and I have just been married a year, but thankfully he was already established with a good job (& several side hustles!) when I graduated just a few months ago. The biggest thing is living below your means. It’s nice to go out and have fun, but living below our means for us, means that in a few years when my friends are still renting apartments and struggling to make ends meet, we’ll be building the home of our dreams! It’s worth the sacrifice right now to be more prosperous later!xoxo, SS
<a href="http://www.southern-stylista.com">The Southern Stylista</a>
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May 21, 2016 at 7:24 pm
So true! I love that point "leaving below our means for us, means that in a few years when my friends are still …struggling… we’ll be building the home of our dreams!" — Totally worth sacrificing for a little now to be set up for more freedom later on! Especially as we get older and other more serious responsibilities pile on!
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