Money Tips You Should Learn in Your 20s

The education system teaches you how to learn and get a job, but hardly tells you how to manage the money you earn. The financial habits that you develop in your 20s have a long-term effect on your financial future.

Many young people are excited once they start earning their own money. They go all out to buy the stuff they always wanted but never had. Most end up with no savings, even credit card debts. This is a fatal trap that should be avoided at all cost. Unless you develop additional fundraising ideas, learning good financial habits is the best way to become fiscally secure.

1. Control your Spending

Credit cards have given us the benefit of spending money that we don’t have. But at what cost? It is easy to pop the credit card every time you see something you like.

Alternatively, you can wait until you have saved enough money to make the purchase. Do you really need it so urgently? Is it the latest model? There will always be newer models in the market. Learn the principle of delayed gratification. You do not have to make that purchase just because it looks or sounds attractive.

Understand that you’re attracting significant credit card interest for each of those purchases. If your earnings are not capable of paying them off at the end of the month, they’re carried forward, and you could be paying for a long time for items that could have waited or even done without.

2. Save

If you’re not putting something aside in a savings account or its equivalent, then you’re squarely in the rat race. You work all month. As soon as the paycheck comes in you settle your bills, maybe have a little fun, and then you have just enough left to sustain you till the next paycheck.

You work to eat; then eat to work. The cycle goes on and on. In finance matters, we say that you should pay yourself first. No matter how grim your financial situation seems, save something for a rainy day. If you’re fortunate enough not to have any emergencies, you can eventually invest this money.

Explore your options and save in a reliable high-interest account.

3. Have a Budget

How many times have you said that you don’t know where all the money went? It always seems so. One day you get paid, and two weeks later you hardly have enough to sustain yourself. By the third week, you’ll be asking for a salary advance. What went wrong? You failed to budget.

Budgeting helps to determine where each coin goes. You also need to be certain that your expenditure does not exceed your income, thus eating into the credit card.

You may be surprised to find that seemingly insignificant daily expenses such as snacks add up to a substantial monthly amount. How about packing a snack from home? Making adjustments on such expenditure will save you some big buck.

4. Consider a Business

The stability of employment is not always guaranteed. A business provides a reliable cushion in case of any eventuality. Go for something that you’re passionate about. At first, you can do it as a hide hassle alongside your job. Ensure that you’re conversant with the rules and regulations of your industry to avoid trouble.

For instance, if you’re dealing in alcoholic beverages in Texas, you should consult on licenses, permits, age limits, Texas mixed beverage audit and so on. Eventually, you can transition fully into the business.

Develop financial discipline while still young and you can enjoy the later years. Otherwise, you’ll be old and gray and still be struggling with basic bills. Make a wise choice now.

By Taby G., Super-Connector at OutreachMama
Photo by Lucky Business | Shutterstock

Taby G. is a super-connector with Towering SEO and OutreachMama who helps businesses find their audience online through outreach, partnerships, and networking. With over six years of writing experience, Taby bring a vast amount of knowledge, style and skill to every project. Her expertise lies in article/blog writing, eBooks, and SEO/informational writing. Copywriting and fiction are the icing of her work with excellent research skills and flawless grammar.