When you’re in your early 20s, you’re either in college or fresh from it, which can leave you pretty terribly confused when it comes to money. In fact, it would be really amazing if there could be someone around in every 20-something year old’s life to give them some quick pieces of advice before they went off and did some experimenting with checking accounts and credit cards. After all, there are some very good points here that could completely mold the way 20-somethings approach their money situations.
Make a BudgetNo, really. You really shouldn’t do much of anything with your money until you understand how much you normally spend. You have a lot to consider here: rent, groceries, bills, car payments, student loans, etc. Fortunately there are some awesome apps and websites (like Mint.com) to help you track your spending and will help you budget out your money. We spend a lot of money on everyday things without even knowing it, after all. It’s best to remain aware of what’s in our wallets.
Cut Down On Subscriptions
Take a good long look at how much money you’re losing just by being signed up for things that you might not even be using anymore. Are you actually going to the gym regularly enough for that expense to be worth it? If you only watch shows on Netflix and/or Hulu, do you really need to have cable TV? And speaking of Netflix and Hulu, is it necessary that you have both of those things? Do you actually care enough to be receiving all those magazines in the mail? Do you even know why you’re getting those magazines? If you don’t, look into canceling all unnecessary subscriptions. That will definitely save you a lot of money that could be going into buying groceries for a month.
Put Money Into SavingsAs much fun as it is to spend your hard-earned money, always try to set some of it aside to save for a rainy day. But when you’re fresh out of college, this is actually harder than it should be. Between the tiny paycheck you probably have at that time and the student loans that need to be paid off, you don’t have an awful lot to put into savings. But the thing is, you need to have some money tucked away for that rainy day, or for an emergency in the future. Take a little bit out of every paycheck and put into a savings account. Never look at that account again until you have to, and it will stay perfectly safe.
Pay Attention to Your Credit CardsCredit cards are not just little pieces of plastic containing invisible money meant for spending. Credit cards are risky little beasts that require you to keep a careful eye on it. Using a credit card regularly without paying the entire balance off every month makes it so that interest rates (which work in percentages!) keep the amount you owe fairly high. And yet at the same time, when you do have a credit card, use it to its full potential. Keep it paid off and take advantage of any rewards that may come with it. Regularly using your credit card while staying out of credit card debt will help your credit score, which is vital when making large purchases like cars or houses.
Spend On Living
More than new clothes or video games or laptops, the best things to spend your money on are experiences and memories with your friends. Choose to go out with your friends and family rather than buying those really fancy RayBan sunglasses. Make a truly happy memory with them.