Hey there, fellow go-getters! As we dive headfirst into the world of careers, ambitions, and adulting, there’s a crucial aspect we can’t afford to neglect—our finances. In this blog post, I’m sharing some insights, lessons, and money management advice that have been invaluable on my journey toward financial growth and financial literacy. So, grab a cup of coffee, get cozy, and let’s talk about smart money moves tailored for us, career-driven young professionals in our 20s.
- Money Management Advice: It’s a Personal Journey
- Mindful Spending in a Consumerist World
- Set a Budget That Works for You
- Use Credit Cards Wisely
- Maximize on Savings Now
- Embrace the Side Hustle Culture
- Plan for Retirement
- Keep an Emergency Fund
- Invest in Yourself
- Audit Your Subscriptions
- Use Cash-Back Platforms
- Reflect, Adjust, and Celebrate Wins
- Final Thoughts
Money Management Advice: It’s a Personal Journey
Before we embark on the nitty-gritty of money management advice, remember that this is all a personal journey and everyone’s finances will look different. Depending on your needs, wants, cities, environments, lifestyles, and more, we all have different financial goals and needs. So, don’t try to mimic one person’s finances to another. Instead, learn from others and tailor the information to fit your life.
Mindful Spending in a Consumerist World
The first nugget of money management advice is simple but powerful: be mindful of your spending. In a society that constantly bombards us with the latest gadgets, fashion trends, new products, and must-have experiences, it’s easy to fall into the trap of mindless consumption. Take a step back and ask yourself if those impulse purchases align with your long-term goals. America can have an extremely consumerist culture, and we tend to think that in order to be happy we need certain items. So really look into what you are buying and think about whether it is actually improving your life. Every time you let go of a smaller, unnecessary purchase, you can put a bit more in savings towards something that is really going to serve you well.
Pro Tip: Create a list of your financial goals—whether it’s saving for a home, an expensive product, traveling, or investing. Refer to this list before making significant purchases.
Set a Budget That Works for You
Creating a budget is not about restricting yourself; it’s about being realistic with what you can do. Understand your income, fixed expenses, and discretionary spending. Break it down into categories, allocate a portion for savings, and set realistic limits for non-essential spending. Personally, I try to save or invest the majority of my income now, because I have less expenses than I may have 5 years down the line. Keep track of your spending and see where you can improve or save money to invest.
Pro Tip: Use the 50-30-20 rule as a start and adjust it to fit your goals. I personally use more of a 50-10-40 framework, but do what works for you.
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Use Credit Cards Wisely
Credit cards can be both a blessing and a curse, depending on your understanding and use of them. Leverage credit cards to maximize earnings, cashback, and points. Look for cards with cashback rewards, travel perks, or points that align with your lifestyle. For example, if you spend the most on dining, look to a credit card that rewards that. However, always pay off the balance in full to avoid interest charges and keep your balance below 20% of the credit limit for good credit history.
Pro Tip: Set up automatic payments to ensure you never miss a credit card due date and incur unnecessary fees.
Maximize on Savings Now
I alluded to this earlier, but one of the most impactful pieces of this money management advice post is to start saving early. The magic of compounding works best when time is on your side. Even if it’s a small percentage of your income, consistently contributing to your savings or investment accounts can set the stage for future financial freedom.
Pro Tip: Consider setting up automatic transfers to your savings or investment accounts right after payday. Treat it like a non-negotiable expense.
Embrace the Side Hustle Culture
In the era of side hustles, gig economy platforms, and remote work, consider diversifying your income streams. Like this blog, I am trying to put in the time to set up additional income streams for myself in addition to my day job. Whether it’s freelancing, consulting, coaching, services, or monetizing a passion project, the extra income can accelerate your financial goals. It also gives you a bit more pocket money to have fun with.
Pro Tip: Allocate additional income from side hustles directly to specific financial goals, such as paying off debt or boosting your emergency fund.
Plan for Retirement
While retirement might seem light-years away, planning for it now is a savvy move. Take advantage of employer-sponsored retirement plans, contribute enough to get the full employer match, and explore individual retirement accounts (IRAs and 401Ks) for additional savings. Try to maximize these accounts year to year for the best tax benefits later on.
Pro Tip: Use retirement calculators to estimate how much you can contribute each paycheck or year, realistically. Sometimes prioritizing these accounts instead of your regular brokerage account can be beneficial.
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Keep an Emergency Fund
Life is unpredictable, and having an emergency fund is a must in any money management advice playbook. Aim for at least three to six months’ worth of living expenses in a readily accessible account. After this initial amount is saved, you can start contributing to investing platforms. This fund provides a financial safety net during unexpected events like job loss or health emergencies.
Pro Tip: Treat your emergency fund as non-negotiable, replenishing it immediately after any withdrawals.
Invest in Yourself
One often overlooked aspect of money management advice is investing in yourself. The more skills and knowledge you acquire, the more valuable you become in the job market and the more you can expand your side hustles. Consider using a portion of your budget for courses, workshops, or certifications that enhance your professional abilities and skillsets.
Pro Tip: Many online platforms offer affordable and high-quality courses. Look for opportunities to upskill without breaking the bank.
Audit Your Subscriptions
In the age of subscription services, conducting a subscription audit is a unique but impactful money management advice. Subscriptions are the easiest way our money can get sucked out of our pockets. Often times we sign up for free trials and forget to cancel. Regularly review your subscriptions—streaming services, magazines, or even gym memberships. Identify and eliminate the ones you no longer use or need.
Pro Tip: Review bill statements and emails to see where your subscriptions might be. There are also apps that can identify them for you.
Use Cash-Back Platforms
Turn your everyday expenses into opportunities with cash-back platforms. Although not always a lot of additional money, apps like Rakuten and Honey offer cash back or rewards for your purchases. This money management advice ensures you earn a little extra with every swipe or click. I have been using both platforms for years now and have saved a couple hundred dollars so far.
Pro Tip: Stack cash-back rewards by using multiple platforms for the same purchase when applicable.
Reflect, Adjust, and Celebrate Wins
Lastly, my money management advice wouldn’t be complete without emphasizing the importance of reflection. Regularly review your financial goals, track your progress, and make adjustments as needed. Celebrate the wins, no matter how small, and acknowledge the strides you’ve made toward financial growth.
Pro Tip: Set aside time quarterly to review your financial situation, celebrate achievements, and recalibrate your goals.
Final Thoughts
In the realm of money management advice, there will always be a thousand tips to make you feel better about your financial situation. Remember that it’s not about perfection; it’s about progress. Each step you take toward financial awareness and discipline brings you closer to the future you envision. So, empower yourself with smart money moves, cultivate a mindset of abundance, and embark on a journey of financial growth that aligns with your aspirations. Here’s to your financial success!
With love,
Aditi <3
Aditi Rani – Figuring Out Life in Your Twenties
*Disclaimer: This is not professional advice. Some links are affiliate. By clicking and/or purchasing, I may receive a commission. It does not alter the price or change your buyer experience.