10 Things I Wish I Knew About Money in My 20s
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It's with great excitement that we present our newest guest blogger, Stephanie Lynch, co-founder of howmuchisit.org!
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Whether you’re in your 50s or just starting high school, you probably already realize that money is a very important part of life. If you manage your money right, then great – you’re probably on your way to hopefully an early retirement and a less stressful lifestyle. However, if you’re having a hard time even hearing the word “money,” then you may be doing the complete opposite.
We all make mistakes with money and everything else in-between, and if you’re young enough, you can fix them and have plenty of time to turn your future around. Even if you think you’re old, there’s still time to make the right financial decisions and live a financially healthy life.
With this guest post, I wanted to share with everyone 10 things I wish I would have known in my 20s.
1. Always be prepared
Always have an emergency fund on hand because emergencies can happen anytime. Why do you think they call it the emergency fund? If you don’t have an account with at least six months of living expenses, then you may want to act fast. Since no income is secure, you don’t want to think about how you’re going to pay for your grocery bill next week.
2. Don’t be materialistic
Stop stressing about what other people are driving or what people are wearing. Most people don’t care. Your $12,000 Honda Civic will get you to the same place as that $75,000 Cadillac. It’s a lot nicer to have a ton of money saved up for retirement than purchase a ton of items you will probably donate five years from now.
3. Be practical
If you can’t afford something, don’t be embarrassed! If you can’t buy something in cash, you may want to second guess your purchase.
4. Don’t spend your salary
If you make $45,000 a year, don’t spend $45,000 a year. Since you don’t want to work the day until you die, try your best to save at least 15% of your salary. Treat these savings like a bill, and you will never know the money exists. This 15% adds up quick and can allow you to leave the workforce at a young age.
5. Avoid credit cards
Unless you’re paying a credit card off in full each month for the rewards, credit cards usually aren’t a good idea. With interest rates north of 30%, these fees can really add up on high balances.
6. Be healthy
Smoking, eating fatty foods and sitting idle can become a big burden on your health. While you won’t see the scars today, it will come to haunt you later down the road. This can lead to many trips to the doctor and trips to the pharmacy.
7. Find someone who shares the same values
It can be very hard to marry someone who spends their paycheck each week or spends money they don’t even have. Unless your significant other is willing to learn about properly budgeting, then you may want to find someone else to avoid a financial mess.
8. Don’t compare
Just because someone has a six bedroom house and five cars, it doesn’t mean they are “rich.” In fact, according to the Millionaire Next Door book, most people who flaunt their wealth are often living paycheck to paycheck. Those who have money don’t show it. So the next time you see someone with an $80,000 car, know that they are probably one paycheck away from getting it reprocessed.
9. Avoid get rich schemes
As tempting as it is to make $1,000 in two hours, none of this works as money will always be hard to earn. If you want to make a few extra dollars, don’t buy a job through an MLM scheme, but instead, consider becoming an entrepreneur with a side business or consider picking up a small part-time job.
10. You’ll never have enough
Even in your 50s, you will feel you will NEVER have enough. Just learn to live with the things you have, and if you really want something, save up the cash to purchase it. As long as you have a roof over your head, a healthy life/family and food three times a day, you can’t complain.
About the Author: Stephanie Lynch resides in Gilbert, Arizona, with her husband and two sons. She is the co-founder of howmuchisit.org - a cost-helping database designed to help consumers find out what unknown things cost in life. In her free time, she enjoys hiking, biking, the outdoors and spending time with her kids.
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