It is often said that your 20’s are the best years of your life. Most are finishing school and stepping into the real world of responsibilities. When you are young you have a blank slate, with the opportunity to craft your future in whatever direction calls to you. It is no secret, however, that your first years as an independent adult can also be very challenging from a financial standpoint. You are likely just learning to budget your money, which, chances are, you don’t have a lot of yet anyways.
As with most aspects of growing up, lessons typically have to be learned the hard way before they stick. That doesn’t have to be the case for you, though, which is why I’ve put together a list of the biggest lessons I learned on my journey to financial security. Here are five things I wish I knew earlier regarding money and how to keep more of it in your pocket while you are still young and establishing yourself.
Learn To Cook
Eating out at restaurants should be seen as a luxury reserved for celebrating something special. Frequent trips to the grocery store and a refrigerator full of options are not only significantly cheaper than eating out but will leave you feeling better, too! Knowing how to cook and being comfortable in the kitchen is an excellent life skill. The best way to do this is to start establishing a weekly grocery budget, as well as tallying how much money you spend every week eating out at restaurants. If you can reduce the dollars you are spending outside your house and put half of that money into your grocery fund you’ll be setting yourself up to buy in bulk and save money, too.
Avoid Bar Tabs
Alcohol can be effective for relieving stress and helping you unwind after a long day or week. Still, there are few things more anxiety producing and bad for your budget than racking up an unnecessary bar tab. There’s nothing wrong with enjoying a few cold ones, but try to keep the majority of your refreshments stored in your refrigerator at home. If you feel you are missing the social aspect of drinking at a bar with friends, don’t forget that it’s totally reasonable (and a lot of fun!) to host the party! If you have reasonable friends they might even be willing to foot the bill for alcohol if you are willing to host the party and clean up after everyone leaves. This is a small price to pay for having all of your drinking fun without any of the expense!
Drive A Beater
This one doesn’t sound flashy and cool, and in a sense, it’s not. When you are young it’s a waste of money to commit yourself to a large car payment on the hopes that you will impress somebody. The truth is nobody cares what car you drive, especially when you are young, and spending hundreds a month on a car that will only depreciate is unnecessary. If you are interested in prioritizing your budget, and therefore your future, when it comes to buying a car a good rule of thumb I’ve always followed is the 10×100,000 rule, meaning either 10 years old or 100,000 miles plus. Additionally, look for reliable brand used cars that operate with simple mechanics, and have modest engines, as this cuts down on your insurance costs too!Saving your money now will allow you to buy cool cars later. (when you can afford them!)
Brew Your Own
The five dollars you spend on coffee every morning may not seem like much, but in reality, it adds up. If you drink coffee most mornings, that five-dollar cup can quickly add up to an additional car payment by the end of the month. Brewing your coffee is not only significantly more affordable, but it can be fun too! Use it as an opportunity to try new beans and brewing techniques, culture yourself!
Establishing great spending habits when you are young will not only reduce the stresses of a tight budget now, but will set you up for success down the road. In life there are few things more important than being accountable to yourself and taking charge of your decisions. The money you save today will set you up to chase your dreams tomorrow. Avoid the temptation of spending satisfaction and stay focused, your hard work will pay off down the road, and you’ll be happy you did!