Your 20s are a time to learn and make mistakes. But, it’s also a time to build the habits that will guarantee a wonderfully successful life. Master the right habits and you’ll travel the smooth road to prosperity. Develop the wrong habits, however, and you could struggle with money problems for decades to come.
Let’s take a look at some of the moves you should make in this most critical decade of your life.
Cultivate the habit of saving
Business magnate W. Clement Stone once warned, “If you cannot save 10 percent of all that you earn, the seeds of greatness are not in you.” We are the sum of our habits, and one of the most important habits you must develop in your 20s is the habit of saving.
Maybe you don’t have a lot of money to save. It doesn’t matter. What does matter is that you consistently save something, no matter how little. It’s the habit that’s important. Start small if you must. Save 1% of your salary but gradually increase your savings until you’re stashing away at least ten percent of your income.
Invest in yourself
Today’s economy rewards knowledge and pays handsomely for skills that are in demand. Consequently, the best investment you can make in your 20s is the investment in yourself. Use this decade to acquire the knowledge and skills that will set you up for life. But, don’t just limit yourself to traditional education.
After your day job is over consider using the internet to acquire highly valuable skills. Read every book, for instance, that you can pertaining to your field of work. Reading just one extra book a month will catapult you ahead of your competition. Find a mentor who can impart you with knowledge and wisdom. Spend you 20s intensively learning, and you’ll spend your 30s and 40s earning more than you could imagine.
Don’t be in a rush
In our 20s we have a tendency to rush to acquire those things that traditionally define financial success. The pressure becomes even more intense as we watch our peers purchase the new car or new condo. Yet, those things that traditionally define financial success may not be best for us. Purchasing your first home in your 20s is not always the right financial decision.
Avoid the transportation trap
As Americans we buy more car than we can afford and get rid of our cars sooner than we need to. Yet, cars are the worst possible investments we can make. Don’t fall into the automobile trap in your 20s. Purchasing a car you can truly afford and keeping it for seven years or more will give you the financial head start that you need.
Defeat lifestyle inflation
It’s almost inevitable, the more we make the more we spend. But, if we can resist lifestyle inflation, we’ll build a stress free and debt free future. The key to building wealth is to spend less than you earn and then invest or pay off debt with the rest. Master this lesson early and the world is yours.
Learn to cook
Think about it. Food is the one item that we will purchase consistently until the day we die. Yet, most people pay far more than they need to by eating out. Unfortunately, millennials are dining out more than ever. According to a survey by the Food Institute, millennials spend 45% of their food expenditures away from home. But, eating just a few more meals at home each week could save the average millennial over a hundred thousand dollars during a lifetime.
Marry the right life partner
Divorce is costly. So too is child support. Dr. Thomas Stanley, author of The Millionaire Next Door, has shown that one of the most consistent traits of millionaires is that they stay married to the same person. Finding the right life partner may be one of the most important wealth building and wealth preserving decisions that you ever make.
Simple steps taken during your 20s can guarantee a lifetime of financial success.
BMWK, what is the piece of money advice you would give someone in their 20s?