Your 20s are when you feel like your whole life is ahead of you. You have this newfound freedom that gives you unparalleled confidence and a desire to live life to the fullest.
I’m sorry to burst your bubble, but by the time you hit your 30s, you’ll probably feel the same way I did: I didn’t take my financial future seriously enough, and it left me with quite a few regrets. Here are five things I wish I understood about money in my 20s.
An Emergency Fund is a Must
I spent a good portion of my 20s living paycheck to paycheck, and so did many of my friends. It was just the way we did things; an emergency fund was a foreign concept, something I didn’t have the luxury of (yet I, of course, found plenty of cash for late-night pizza delivery). I eventually learned that an emergency fund isn’t a “nice to have,” it’s a non-negotiable part of a healthy financial life.
Lifestyle Inflation Comes Out of Nowhere
I always assumed a new job would lead to a new apartment and new furniture and new clothes and new…you get the picture. And this was another thing that seemed so normal; spend even a few minutes on social media, and you’ll see people constantly upgrading their lives.
But this has a name: lifestyle inflation, and it’s the silent killer of wealth. I’ve since learned to live on less than I earn, and I’m grateful for the mindset shift.
Budgeting is About Freedom, Not Restriction
For many years, I saw a budget as a chore—a restrictive plan that would prevent me from having any fun. I now know that’s completely backwards. Instead of throwing down plastic at every turn and ignoring my bank account for fear of overdrafts, I budget constantly, and it’s given me back agency and control.
A well-designed budget isn’t about saying “no” to everything; it’s about allowing yourself to spend on the things that you genuinely value while ensuring your financial goals are on track.
Learn to Cook
I love cooking. I wasn’t even that bad of a cook in my 20s, either, but I wasn’t doing nearly enough of it to feel confident. Because of that, I was constantly scrambling for cash to go out to eat or assemble change to survive on random snacks. Cooking is an incredible life skill and happens to be one of the most effective ways to save money.
Learn to Set Better, More Specific Goals
Goal setting isn’t something everyone is inherently good at. I used to think saying “I want to save more money” was enough to get me to do it. Of course, it never was, and I thought there was something wrong with me. There wasn’t, but there was something wrong with that approach — I needed a “why.”
Having a “why” for your savings makes it easier to stay on track. Whether it’s saving for a down payment on a house, a once-in-a-lifetime trip, or starting a business, clear goals give your money a job and provide the motivation you need to make smart choices.
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