In my last blog post I shared 10 personal financial tips that I learned in my 20s. Today I share ten more. You’ll notice that in addition to personal finance lessons, this post includes a few career and life tips as well. Regardless of your age or stage of life, I hope you find value in these ideas.
11. Know Where your Money is Going
If you desire to steward your money well, understanding where it is going is essential. When I got my first job out of college, I kept every receipt and recorded every single expense in an Excel spreadsheet. Although this was a tedious process it helped me to understand how I was spending my money. Today things like Mint.com can make this process much easier.
12. Evaluate your Priorities
Know what is most important to you in life and make sure that the way that you spend your money reflects these priorities. When it became clear to me that I value experiences and people over things, I decided that I would limit the amount that I spend on things like housing and vehicles, in order to be able to spend more on the things that are more important in my life. Matthew 6:21 says, “For where your treasure is, there your heart will be also.” Strive to have your spending align with your priorities. Creating a spending budget is the best way to do this.
13. Think Carefully Before Buying a House
It is a common belief that buying a house is always a better financial decision than renting, but this isn’t true. After accounting for property taxes, insurance, potential mortgage insurance, repairs, maintenance, and improvements owning a home can be very expensive. I first considered purchasing a home right out of college but ultimately decided to wait three years before pulling the trigger, which in hindsight was a great decision. If you do decide to buy a house, plan to own the house for at least five years and don’t get a mortgage for the maximum amount that you are approved.
14. Shop and Sell on Craigslist
Use Craigslist to get some great deals on quality items. Although there is some risk involved, purchases on Craigslist don’t need to be limited to small transactions. In my 20s I sold two vehicles and bought one on Craigslist. Also learn to negotiate. My wife found a couch on Craigslist that we really liked listed for $1,500 ($3,500 new) that we really liked, but we couldn’t afford what they were asking. We sent them an email telling them that we’d give them $750 and never heard anything back. Then two months later, out of the blue, the seller emailed us to tell us they’d sell it to us for $1,000. We’ve been enjoying the couch in our living room for the last couple years!
15. Be Generous
Regardless of if you make $15,000 per year or $80,000, give sacrificially. The truth is that God owns all that we have, and we are called to be generous. Although it required sacrifices in other areas of my life, it has brought me joy to be able to give to my church and those in need over the last decade. Developing an “open hand” mentality in one’s 20s can lead to an attitude of generosity for one’s entire life.
16. Travel Inexpensively
Stay in hostels or with friends and family. With kids, traveling becomes more difficult and more expensive. In my 20s I traveled to twelve European countries, New Zealand, Australia, Fiji, Uganda, Indonesia, and Hawaii and paid very little or nothing for lodging on these trips. Also take advantage of the value and fun of road trips!
17. Informational Interviews
Make a habit of asking people that you’d like to learn from if you can take them out for coffee or lunch. Before taking my first job in financial planning I sat down with about a dozen different financial planners. These converstations were invaluable for learning about the different career paths and types of financial planning firms. Although the focus of these interviews should be to learn, they can often lead to job offers!
18. Get Involved
Use your skills and abilities to get involved with organizations outside of your work. This can be fun, a way to help others, and a way to grow as a leader. In my 20s I got involved at my church, prepared tax returns for low income families, tutored inner-city high school students, and served on the board of the local Financial Planning Association chapter. My life is richer and fuller because of my involvement with these organizations.
Never stop learning, whether formally or informally. There are infinite ways to continually grow professionally, personally, and spiritually. Some of the ways that I have learned are by obtaining my CFP®, joining a public speaking club, reading many books, and participating in a full-time leadership development program at my church for a year.
20. Take Risks
I am a person who prefers certainty and security, but I have learned the importance of taking thoughtful risks in order to achieve things that I otherwise couldn’t have. The biggest risk that I have taken, after much thought and prayer, was starting Wacek Financial Planning, LLC. Because I took this risk, I am now able to help people with their finances, that I otherwise could not have. I'm certainly glad that I took this leap of faith!
Photo courtesy of fr4dd