Financial Steps for People in Their 20's.

Posted on May 04, 2021 by Brianne Mundt, One of Thousands of Life Coaches on Noomii.

Graduating college and becoming a real adult can be overwhelming and scary. It’s not exactly within our comfort zones to be entirely responsible for ourselves. Plus, when entering the real world, I had a lot of basic questions I felt a bit stupid for not already knowing. No one teaches you how to pay taxes or what taxes really entail. They don’t teach you about saving for retirement, negotiating rent prices, how to pay back loans, how the stock market works or how to budget.

I could write a book on each of these topics alone – and many have already been written. But here are the basics with references to get more of a deep dive.

Create A Budget.
Everyone can benefit from a budget – you should know where your money comes and goes each month, how much you’re paying for subscriptions, areas to cut back, etc. Creating a budget can highlight where your financial priorities should be. Should you be saving up an emergency fund, investing, and/or paying off student loans?

There are lots of ways to go about budgeting but the main concept to keep track of is how much you make vs how much you pay in bills and break it down from there. To learn about types of budgets, check out this article. Different budgeting styles work for different types of people – not all budgets have to be done in a spreadsheet (even though I freaking love them).

Start Saving for Retirement.
No matter what your circumstances are, you should figure out a way to start saving for retirement. I know it seems like a long way off – and it is – but the sooner you start saving the better off you’ll be. When you’re old and want to enjoy your golden days leisurely, you’ll thank your twenty-something self for starting a stash. If you’re in grad school or if your company doesn’t offer a 401k plan, take a look at Betterment – it’s a great place to start planning for your financial future and you can set up a Roth IRA for FREE with no minimum contribution. You could literally put $1 away a month (although I suggest doing a bit more).

Pay of Debt QUICKLY.
Not having hefty recurring monthly payments for years on end is incredibly freeing – especially if you have credit card debt. If you have credit card debt, pay that off as fast as possible otherwise you’ll be in money quicksand for years. If you have student loans or car payments, try to get the lowest interest rate as possible – because that sh*t adds up. Pay off the loan with the highest interest rate first. When you can, pay more than the minimum. Student loans and debt can be complex topics and very situational to every individual. Consult a knowledgeable person and do some research to figure out how to best go about this.

Get a Credit Card – But Control Yourself.
Credit cards can be incredibly beneficial – if you don’t spend more than you have. Credit cards help build a credit score and establish credit history. A high credit score can help you get lower interest rates, qualify for loans, apply for a lease, etc. Additionally, if you spend money with a debit card or cash you’re losing out on free money! AKA Credit Card Points. Every time you spend a dollar you could be earning back two cents to go towards a dream vacation, or cash back. Look into credit cards that suit your interests. If you like travelling, check out Capital One’s Venture card. If you love Amazon, check out their Prime membership card. There’re lots out there. If you don’t have any credit (or if you have bad credit), try applying for a beginner’s card to build it up before trying for a rewards driven card.

Warning with Credit Cards:
Don’t spend $3,000 in the first month to get the 300,000 points if you don’t have $3,000. Credit card debt is no joke and it’s a pain in the booty to get out of due to the high fees and interest rates.

Don’t open a bunch of credit cards just for the rewards. Pick one and use it for all of your purchases until you’ve learned how to avoid that impulse purchase at Target.

Personal Finance can be Complicated.
There are a lot of different ways to approach the realm of personal finance. Since we all have unique lives – it can be difficult to apply a blanket-method to everyone. Everyone has different priorities, goals, risk tolerances (regarding the stock market), etc.

For more in-depth help and information I strongly recommend reading Erin Lowry’s award winning book: Broke Millennial. It covers so many relevant topics that anyone under 35 should read it – this post barely scratches the surface.

For more hands-on help, feel free to set up a coaching session with me or consult a reliable financial adviser. But make sure they’re reliable, you don’t want to wind up in an Ozark situation. . . We can discuss loans, cosigners, debt, retirement planning, the stock market, salary negotiation, and more.

DISCLOSURE: I am not a financial adviser – I have a business degree and a love for reading personal finance books. I consider myself very knowledgeable on the topic but am not a certified professional. I can help educate you and tell you what I do, but I will not handle your money for you.