Financial Advice For Your Twenties

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Our son is just out of college and about 4 weeks into his career in software & web design.  He signed up for all of his work benefits right away, including his health insurance and retirement 401K plan.

He’s very thoughtful with his financial approach, but I saw an online chat about ‘Financial Advice For People In Their Twenties’ from the fatFIRE Facebook Group that I thought I would also organize and send to him.

Here is my distillation of 156 comments from a pretty accomplished bunch of FIRE advocates …

INVESTING

  • Commit Yourself To Financial Independence
  • You Don’t Need Thousands Of Dollars To Invest – Start Small
  • Invest More Early – Understand Time-Value Of $
  • Buy Index Funds – Skip Financial Advisors
  • Max Out Your Roth IRA As Soon As You Can
  • Start Investing In 401k On First Day Of Work
  • Pick A Sensible Investing Plan & Stick To It
  • Don’t Buy Individual Stocks
  • Reinvest Your Dividends
  • Real Estate Investing Is A Huge Wealth Builder
  • Learn About House Hacking
  • Get A Part-Time Job In A Property Management Office

SPENDING

  • It’s Not How Much You Earn, It’s How Little You Spend
  • Buying Stock Is Better Than Buying ‘Stuff’
  • Don’t Buy Stuff To Impress People
  • Buy Used Cars Instead Of New – Invest The Extra
  • Drive The Worst Car You Can Live With
  • Live Rent Free As Long As You Can

DEBT

  • Buy Everything With Cash
  • Don’t Get Into Credit Card Debt
  • Think Of Interest As Something You Earn, Not Pay
  • Never Go Into Debt – Except Mortgage
  • Never Carry Debt – Student Loans Are A Hoax

WORK

  • Graduate College With A Clear Purpose In A Desired Field
  • Work Hard – Be A Leader At Work
  • Bank Your Raises Or Bonuses Each Year – Resist Lifestyle Creep
  • Working In An Office Is Overrated – Find A Job You Love
  • Sales Roles Can Be Very Lucrative

LIFESTYLE

  • Marriage & Kids Are Awesome
  • If You Must Get Married, Don’t Get Divorced 😉
  • Get & Stay Healthy – Your Best Investment
  • Control Your Ego – The World Doesn’t Revolve Around You!
  • Travel The World
  • Always Ask For Advice
  • Take Action – Jump In & Learn!

I think there are a lot of great ideas here that I certainly would subscribe to.

Anything that you would add to the list?

Image Credit: Pixabay

9 thoughts on “Financial Advice For Your Twenties

    1. Lifestyle ‘inflation’ is a big risk for young people. Many want to keep up with the Jones’ and show their friends what a big success they are.

      Liked by 1 person

      1. This is great list. The only lifestyle inflation my husband and I have experienced is having kids. We live in the same apartment condo we bought as newlyweds 14 years ago. We have no credit card debt. No car loans. And we’re now mortgage-free. We have nearly $600,000 in retirement savings, $80,000 so far in college savings for the kids, plus pockets of other savings for vacations, home maintenance, etc. So we truly feel like we are still in our 20s — except for steadily increases salaries, which has widened the gap between what we spend and what we save. It CAN be done! Your future self will thank you!

        Liked by 1 person

      2. Wow – it sounds like you are doing great! As long as you’re condo is working for you, why buy more than you need? Banking your raises year after year is the quickest way to accelerate your savings rate without feeling a pinch!

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  1. Great advice! Put all savings on autopilot! I was able to get my two daughters to automate their savings when they graduated college and started their first real jobs. I explained, “you’ll never miss the money, if you never get used to the extra money”. It’s great to (now) get occasional calls and texts about how large their retirement and savings accounts have grown already!

    Liked by 1 person

    1. Our son signed up for his 401k right away, but I’m not sure if he set up a separate auto deposit to his savings account. He’s basically saving everything at this point, but it would be good to have the structure.

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      1. I’m trying to get these ideas into my college freshman, but the temptations of the next computer, game, pizza, or shiny object keep his bank balance precariously close to zero. He is lucky that he is still a student, and not facing the real world yet, but I wonder how folks got their young adults to actually absorb these types of idea? I’ve been saving his entire life to be able to pay for college and the associated expenses (and feel we have enough to put both him and his younger sister through 4 years each), and it seems that he doesn’t appreciate the value of saving his money yet.

        Liked by 1 person

      2. I’ve admitted before that I was like that in college myself. I ran up my credit card on dumb things that weren’t needs. The good news is that computers, games & pizza are much less pricey lessons to learn from than things that come after college. We paid off our college debt fast (including student loans) and never looked back.

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