5 Things I Wish I Knew About Money In My 20s

Money is meant to give you more freedom, not less.

I landed my first job out of college teaching middle school Spanish. Woefully underprepared, I went in with nothing but an open-heart and an unlimited supply of energy.

I remember when they told me my salary: $35,000 per year.

They might as well have said I won a million dollars.

On my first day, I drove to school, beyond nervous, in the same forest green, ’95 Honda Civic, that my parents bought me in high school.

I don’t remember much about that first day, other than the thrill of day one as an official adult.

I told a friend that I planned to spend my first paycheck going to a spa, just because I could. Having a full-time paycheck was a new and exciting experience, and I planned to enjoy my newfound riches.

I was living with my parents at the time but quickly rented a cute little apartment for $975 per month. A dream come true.

I did not realize how good I had it back then:

  • No car payment
  • No debt
  • A paycheck that felt like it was more than enough money for the simplicity of my life at the time

But I didn’t do everything right. Looking back now, there are a few things I wish I had known then that would have been super beneficial to future me.

1. Retirement is sexy

My first meeting with HR to discuss benefits was so foggy and confusing. I was still reeling from hearing that I would be earning a whopping $35,000 per year! What else even mattered? The HR lady mentioned retirement matching, but I brushed it off as irrelevant to my current circumstances.

Fast-forward ten years, I now wish I had matched them to the maximum available.

Here’s why: Forbes says you should have one year of your total income saved by age 35, or 15% per year. A 22-year-old version of me could not have imagined even ever BEING 35, so I may have matched a small amount of what my company was offering.

That, my friend, is just leaving free money on the table.

At that time in my life, it would have been easy to increase my retirement savings without having to pinch in other categories. So if your company offers to match you for retirement, take them up on the full amount if you can. Your future self will thank you, especially if you end up quitting your job and traveling the world for a few years.

2. Saving is king

After working for a year or two, I remember feeling as though I didn’t know what to do with my money. I wasn’t a millionaire, but my income far exceeded my expenses. I would spend money on things I didn’t need, just to make my work feel worth it. Eventually, I did start saving, but I wish I had more.

If you can, have a portion of each paycheck deposited directly into a high-yield, online savings account.

Choose an amount that feels doable, but aim for the high-end of doable. The best part is, you won’t notice the money is gone, and that account will keep growing and accruing interest. This account is not for wants, but rather, to have as a safety net in case you lose your job or, once again, you feel like quitting your job and traveling the world for a while. Catch my drift?

3. Budgeting makes you feel like a baller

I highly recommend downloading and paying for YNAB. Short for “you need a budget,” this app is a godsend. It connects to your bank account and allows you to allocate every dollar you earn to a specific category.

For example, you put aside money for your needs, like rent, groceries, bills, etc. But then you can also allocate money for an emergency, savings to buy a car, a vacation, even small things like haircuts or clothes. This way, you can feel good about spending money on things you actually want while also planning ahead for larger purchases.

It’s like the digital equivalent of stashing cash in envelopes in your underwear drawer.

For example, if you’re dying for international travel, set up a category for it in your budget and add to it a little each paycheck. That way, when those ticket prices to Thailand dip, you can snag them without hesitation.

4. Invest in yourself

Once you’ve got those first three steps covered, make space in your budget to invest in yourself. Ask yourself, what truly interests you? What lights your soul on fire? If you currently have a job, you may want to spend money on professional development courses that will help move your career forward.

In my case, I knew I wanted to get TF out. The daily grind began to feel heavy and boring.

So after three years of teaching, I put in my notice. I signed up for a $1600 course in Barcelona to learn to teach English and stayed there for two years. It was the best.

Having the money to invest in the course and getting settled there for the first few months gave me the freedom to work part-time and enjoy my newfound European lifestyle.

5. Consider debt carefully

This one sounds obvious, but hear me out. There has always been a part of me that is a free-spirit and another part of me that craves stability. Had I only listened to the part the craves stability, I likely would have stayed at this job or one similar. Eventually, I would have purchased a house, and a better car, both of which become major, long-term expenses. Had I done so, it would have been MUCH more difficult to explore the world later.

Spend your money where it counts for you and do your best not to compare yourself to others.

The entire purpose of money is to provide you with more freedom, not less. So ask yourself what freedom looks like to you. This is not to say that buying a house or a car should be avoided — for many, this is freedom. Instead, it is to encourage you to do some real soul-searching and ask yourself what YOU want. I’m really glad I did.

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International college advisor, writing coach, essay magician, editor. I empower people to see their potential. https://www.studentservicesinternational.us/

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