How to not be terrible at money in your 20s

If you went to a liberal arts college and didn’t take a financial class, or just sucked at accounting or economics, this article is for you.

If you worked a full-time job for two weeks and impulse bought a pair of Yeezys with your first paycheck, this article is for you.

If you are a recent college graduate with a job and a lot of debt, this article is for you.

Welcome to another article that I like to call “I Have No Idea What I’m Talking About, But I Don’t Care.” I graduated college with a double major in English writing and business communication. I got through economics and accounting with tears in my eyes and frequent tutoring sessions, but I learned a few things about managing money when you’re a young adult. Specifically, I got a financial advisor.

Some disclaimers so I don’t get angry comments:

  1. This is subjective and based on my very limited experience.
  2. The financial skills in this article do not include consideration for familial situations. I have no children or significant other, so this is particular to single individuals.
  3. These skills may work for some, but are not going to be applicable to all. This is just a fun way to get a general idea about how to manage finances overall.

Make a budget

Remember how you would use Microsoft Word for everything in high school? Well great news, Word has a friend. Her name is Excel. You can make a budget by copying the following format.

  1. Go to your online accessible bank account, and write down your monthly income after taxes.
  2. Go through all the bills you owe. Student loans, internet, phone bill, etc.
  3. Put them in columns that look like this:
    1. Note: This is just an example of a budget. This is a loosely-based average on the money that millennials in their early twenties are apt to make. Please also note that this example budget does not involve eating out or gas costs.

That’s how you start making a budget. Take the difference of your income and expenses, and consider that some roaming money. You can do a few things with that extra pocket change, especially because you’re young a dumb. You’re going to want that pocket change to do dumb things with your friends, like go out.

Cut out unnecessary spending

For a lot of people, unnecessary spending can look a lot of different ways. For me, I had to cut back on my wardrobe and clothing expenses. I love buying clothes, but I realize that it might not be the most healthy thing for my pocketbook.

Examples of things you may consider cutting back on:

  • Starbucks
  • Fast Food
  • Impulse buys
    • Ranging anywhere from electronics to candles to shoes to clearance Chapstick at Target, impulse buys are a bad habit to curb right now. It can definitely save you money if you cut back on impulsive spending habits.
  • Impulse trips
  • Airpods
    • You look dumb

Start investing

The next step is to invest little by little. There are a few ways that you can do this. The first is to utilize the benefits of your job if your workplace offers them. Enroll in your 401k plan. The 401k, in short, is way to save for your retirement. You can save and invest, and the money is deposited into your 401k from your paycheck.

For further investing initiatives, one of my favorite platforms is called Betterment. It’s a website that lets you choose your desired monthly deposit into your Betterment account. You don’t have to particularly choose which stocks or bonds to invest in if you don’t want to fret with all that jazz. You can simply balance your portfolio between conservative (which is more bonds than stocks) to moderate (which is half and half) to risky/aggressive (which is more stocks than bonds).

Another app that I use on my phone is called Acorns. It’s a cute little app (it’s adorable) that takes all of your purchases and rounds them up to the nearest dollar and invests literal cents for you every so often. You can balance your stocks and bonds as you like the same way that you do on Betterment. I highly recommend Acorns as the easiest way to start investing in your future.

Get a credit card, or don’t

Credit card companies oftentimes target individuals who have just graduated colleges for marketing a credit card to them. The idea, in and of itself, sounds enticing. It allows you to have an item that you want now without having to pay for it for a little while. However, that can be a bit of a deadly trap for some people, especially if you aren’t making regular payments on a credit card. Credit cards are a great idea if you have the income to support them and the diligence to pay them off before they start accruing insane amounts of interest and ruining your credit scores. Getting one or not getting one is up to your discretion, but try to apply for ones that have a “same as cash” initiative or very low interest.

Start paying off bills

I’m going to just make an assumption and say that you have student loans. It’s a tough world out there for just about any college graduate to not have loans. Make a conscious and continual effort to pay off your student loans. Not only will paying them off better your credit score, but it will also help unshackle you from the cold, dead hands of a university education. Pay off your damn bills, whether its student debt or a credit card, pay them off.

Hire a financial advisor!

Yeah, this was the best option for me! I have a great time balancing and learning about my finances with a financial advisor. I still have a lot to learn.



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