Earlier this year I turned 30. Having lived precisely 30 years on this earth, I’ve come to know a few things.
30 is when men begin to wake up in the morning to see their hairline is beginning to move back and thin. Uncles Phil’s cul-de-sac no longer seems implausible, but a likelihood. It’s the time when you have to consider the fact that no amount of brushing, light finger strokes, tea tree, canola or even holy oil can restore your hairline to what you saw in the mirror as a 23-year-old.
30 is when unexpected people from college, who you can’t recall looking at twice, have somehow transformed themselves into heartthrobs. It’s also when we find many of our beloved college heartthrobs have transformed into aunties and uncles.
At 30, it’s no longer reasonable to think you are included when someone refers to the “young people.” No, that old person on stage is not talking about you. They’re talking to the high school kids in the room. They are the future — you are old.
Having lived through 30 years of life and hosting a podcast called Manage Your Damn Money, I have a slight bit of insight into what mistakes to avoid with your money in your 20s. This list is wholly personal and represents much of what I did (or wish I had done) with my money through my now departed youth.
1) Be Intentional and Aggressive Paying Student Loans – The number one regret I have in financial management is not having been aggressive with my student loans early. Interest and accruals are real. Since finishing graduate school, my loan debt total has increased by over $20,000, mostly due to my being passive in my approach. Be aggressive. Pay more than you need to. Make it a priority early and get out from under the American College Peonage system.
2) Commit to Creating a $10,000 Stash of Cash – $10k is a big number. It’s also a number that will keep most 20-somethings afloat for a moment if disaster hits.
3) Set Up an Independent Roth IRA – A Roth IRA is a retirement account that allows you to save for old age and withdraw contributions without penalty when needed. Making small, consistent contributions over the long-term will pay huge dividends. I opened my Roth IRA at age 20. With monthly contributions of between $50 and $75 over 10 years, my account is knocking on the doorstep of $20,000.
4) Get Acquainted with Proactive Investing – Assuming you are getting the max company match on your 401k at work and maxing out your cash savings, you should now be turning your attention to how you can make extra money work for you. Do you know what it means to invest? Have you tried to learn? I once made $4,000 from UnderArmour stock in a matter of four months. If you have no idea how that’s possible, you need to spend some time learning about investing in stocks and other proactive investing vehicles.
5) Live Below Your Means – There is no greater pathway to financial freedom and empowerment than living below your means. Low monthly bill totals are the most effective way to get the most out of early career incomes. You don’t need granite counter tops. You don’t need a recent model BMW. Take the bus. Get a roommate. 20-somethings don’t need privacy.
6) Consider Viable Side Hustles – Side hustle money is the greatest way to attack debt or future financial goals. Extra money that’s not already earmarked for a bill allows you to funnel it toward a particular goal. Drive Uber. Sell trinkets or those scarves you love knitting. Every little bit of extra cash helps you make progress on the things you feel are most important to your long-term financial success.
