Top 11 Things I Would Advise 20 Somethings to Do For Financial Independence Part 1

Personal Finance

Written by leahb

April 4, 2023

About a year ago friend of mine asked for advice I would give a 20 something for Financial Independence. There are some tips for Financial Independence that apply to everyone in every situation. I had to think about the advice I would give to myself if I could go back in time to my 20’s. Because MAN does it make a difference when you start early and with good habits. Although I’ve done OK – if I had known these things back then, things would be even better. So here they are, in no particular order.

Financial Independence and saving

1. Live as healthy a lifestyle as you can

Getting sick and needing medical care is expensive. Especially so in the USA, but even if your healthcare is “free” there are still other costs to being sick. Like the amount of time you spend out of work. And the toll it takes on your body. Since an unhealthy lifestyle can also lead to chronic conditions later in life, do your wallet and future self a particular favor by living as healthy of a lifestyle as you can.

2. Always evaluate “need” versus “want”

Everyone should do this. The reason I consider this Financial Independence advice for 20 somethings is that it took me a decade or so before I learned this. As soon as I started making my own real money, I bought a lot of crap. Once I had more than enough to cover rent and food, I found myself buying things just because I wanted them. I thought I “deserved” them. And then never ended up getting my money’s worth out of them because I never had time or it just wasn’t as great as I thought. Or just paying more for things than I should have. And most of that stuff ended up in the trash.  I NEED food. But I WANT a steak. I NEED a smartphone. But I WANT the newest iPhone.

3. Saving is important but you are better off finding ways to make more money than spending less

I haven’t found a financial independence website yet that doesn’t recommend saving. Because it is important. It doesn’t matter if you are making $300,000 per year if you spend all of it. But there is a limit to how much you can budget. Things cost money now matter how frugal you are. I remember very distinctly when I learned this lesson.

It was when I was working for a drug store chain and ended up taking a year off from college. I started right after high school, but I didn’t really know what I wanted to do. And the year off seemed like a good idea. One afternoon I was talking to one of my co-workers who also happened to be a grandmother. She was talking about her life and financial issues and it struck me that she and I were in the same boat. It hit me then that I did NOT want to be dealing with this crap 40 years later. In that moment, I decided I needed to figure things out and go back to school.

And over time in my career, I have made a point to learn new skills, or increase my expertise in old skills.

4. Start investments or retirement accounts ASAP

Everyone knows this, but so few people do it. We mean it! Start earning interest when you are young. ‘Nuff said.

5. Don’t be afraid of taking calculated career risks when young

I am a huge fan of calculated risk. Weigh the pros and cons. Learn more about it than the average person does. You know yourself and what you are capable of. Can you do it? If so, then take the leap. Asking for a raise. Telling your bosses boss that you want to be considered for an open position or promotion. Moving away from your support network to take a great opportunity. Taking a job in a new field with education but no experience (yet!). Be brave, but also be smart about it.  

6. As much as possible only take “good” debt

Some Financial Independence gurus insist there is no good debt. For those of us NOT born with a silver spoon it is unlikely we won’t need debt at some point. I think of “good” debt as an investment. A mortgage can be a good debt because a home is unlikely to lose value. Loans for college can be good debt because the education can lead to higher paying jobs. A car loan is necessary for most people, but it is not good debt. Cars typically do not appreciate in value. They are useful, and in most cases necessary, but still not an example of good debt.

To recap – Advice for 20 somethings to do for Financial Independence Part 1 is…

Live as healthy as you can. Evaluate need versus want. Saving is important, but finding ways to make more money is more effective than budgeting. Start investments or retirement accounts as early as you can. Don’t be afraid of taking calculated career risks when you are young. Try to only take on good debt.

My word count is telling me to stop here and continue seven through 11 tomorrow. If you liked Part 1 of my list, please return for part 2. And subscribe or follow!

Written by leahb

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