I once had a friend say to me that you find yourself in your twenties. I’m not sure if that’s completely true, but I do believe that we find bits and pieces of ourselves in the first few years we spend in the “real world” after college.
I, for one, learned a lot about money management principles, which have formed much of my financial philosophy.
Here are 9 money lessons that I learned in my twenties. If you’re in your twenties or even thirties, perhaps you can relate.
1. No one is going to manage your money for you
I don’t think that I ever really thought about money management until it was absolutely necessary. While I did pay the bills and learn some practical life skills in college, it wasn’t until I got my first professional job that I was actually in charge of my own finances. No one (read: my parents) was looking over my shoulder telling me what I could and couldn’t afford. I was in control of my financial destiny – for better or for worse.
2. Money doesn’t grow on trees
Obviously, I knew that money didn’t literally grow on trees, but I also didn’t understand the value of a dollar. Growing up, whenever I needed money, I simply asked my parents for it. So I knew how to spend money, but didn’t understand what it took to earn it. I’m now a big proponent of parents teaching their children about money management, even at an early age.
3. Education is essential when it comes to money
It’s unfortunate that financial management is not taught as a course in high school because it could really benefit a lot of young people. Many money mistakes are made early in life, including piling on credit card debt. Then, in your twenties, you have to figure out how to pay off your debt. It’s never too late to educate yourself about money, so look to financial experts such as Suze Orman and Dave Ramsey to learn how to manage what you’ve got.
4. Budgets are key
Though I finally had autonomy over my own finances, I still lacked control. What I needed was a management system in order to know what was coming in and what was going out, as well as a way to make sure that I was not overspending. I created my own budget with the 5S System, and it has worked very well for me. Although there are ways to manage your money without using a budget, this system works well for many people.
5. It is possible to not use credit
Although it is not always convenient or desirable, it’s possible to live without using credit cards. And when you figure out how to do it, a burden will be lifted off your shoulders and you’ll gain financial freedom. You will also develop important life skills such as patience, hard work, and perseverance as you save up for what you need and want.
6. You must make the effort to shop around
I really dislike shopping, whether it is for clothes, groceries, or for gifts. I have a tendency to buy the first thing I see that fits my needs. “Get in, get out” was my shopping philosophy until I learned that shopping around and utilizing discount coupons can really save me money. It takes time and effort, but pays off by helping me stick to my budget and not have to use credit.
7. Expect the unexpected
Life can be full of surprises, and I’m more at peace when I’m prepared for them. Over the years I have built up a good-sized emergency fund for when the unexpected comes. But the unexpected is not always a bad thing. Sometimes the unexpected comes as a bonus check, a raise at work, or even a forgotten $20 bill in a winter coat. In those instances, I either put the surprise to good use or simply enjoy extra money that I did not have budgeted!
8. Money doesn’t solve problems
Every once in a while, I find myself thinking, “If only we had a little more money, then life wouldn’t be so challenging.” But challenges can actually be a good thing. We as humans are designed to work and solve complex problems. We would be unfulfilled if we didn’t have to work hard to earn life’s rewards. I’m not saying that having more money won’t sometimes help a bad situation, but problems never just disappear because of money.
9. It’s better to give
There’s a certain sense of satisfaction that goes along with leading a life of stewardship by giving of our time, talent, and treasure. I find that when I am less selfish, I am more at peace. Giving goes beyond just the monetary level, and you don’t always need to do big things to make a big impact. Mother Teresa once said, “In this life we cannot do great things. We can only do small things with great love.”
In my twenties, I’ve learned to manage my money, be thrifty, be responsible, and be a good steward. I still have a long way to go and I still have not “found myself” completely, but I also know that my path to success will not be just a big paycheck. There are more important things in life than money.
What did you learn in your twenties about money management? Share your experiences in the comments below.
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