Top 11 Things I would Advise 20 Somethings to do for Financial Independence Part 2

Personal Finance

Written by leahb

April 4, 2023

Yesterday I wrote about the first six things I would advise 20 somethings to do for Financial Independence. As a reminder, that list is below

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.

Where is the rest of the list? Look no further…

7. Always evaluate ROI on large purchases and good debt

Before you can decide if a mortgage or student loans are good debts, you need to calculate the Return on Investment, or ROI.

The basic ROI formula is (Income or profit/Cost of investment) *100

If the house you want to buy has major problems that are going to cost a lot of money to fix it probably doesn’t have a profitable ROI. If it costs $80,000 to get a degree in a field that pays $30,000 a year, that is also not a good ROI. I like to think of ROI in terms of how long it takes me to get back my initial investment. If you never do, that’s a bad investment. If you do, then the time it takes to make it back is up to your personal choice. Consider though, that an $80,000 student loan over 10 years and an interest rate of 4.2% will actually cost you $98,110. Assuming you can make the $818 monthly payments on time.

Check out this site if you want to calculate on your own


A $425,000 mortgage with 20% down, and 6.86% interest rate over 30 years will cost $802,979. Mortgages are a little different because even though you don’t usually make money on your home, you can. If you are paying a mortgage, you probably aren’t paying rent, so you have savings. And you are earning equity over time. You might also pay it off early and decide to rent it out after you buy an upgraded home.

Check out this site if you want to calculate on your own

8. Evaluate purchases for quality versus quantity versus use

This is another Financial Independence tip that everyone should do, but took me a while to figure out on my own. Evaluating prices on things you need to purchase based on the quantity you need, quality you need, and how much you are going to use them. Here’s what I mean.

I need a pair of work boots. I can buy cheap poor quality, or expensive high quality. If I am going to need to wear them every day, I want to buy an expensive high quality pair. I will use them often and I don’t want to have to replace them often. This is an investment. A $100 pair that lasts a year or longer is better than a $60 pair that needs to be replaced every 6 months.

If I am essentially an office person who needs work boots to visit the job site every once in a while, I don’t need that. I can get away with buying the cheaper pair. That $60 will probably last me more than two years if I only wear them once every two weeks.

9. If you are stuck, don’t be afraid to ask for help

Oh man was this one though for me. I’m still not sure if I have really learned this. But. Ask for help if you are stuck. If you need help with something ask. People will surprise you. Sometimes it’s the ones you expect to help that don’t. It could be people you never expected to help that do. They key is that people won’t know you need help unless you ask. And you will stay stuck for much longer than if you had asked.

10. Take every opportunity to learn new stuff

Knowledge is one of those cool things that no one can take away. And almost always useful at some time in the future. I had a job once where things in my department were going slow. There wasn’t much to do, and I could have slacked off waiting for things to pick up. But I didn’t. I let management of the other department know I didn’t have much to do and was willing to help them out if they needed it. It gave me experience that I didn’t have before. Seven years later, I was up for a job that required experience in that specific area in addition to my other skills. I got the job. And that job opened up a whole new world for me.

11. Don’t automatically increase your lifestyle with a raise or promotion

When you are starting out in the working world, you get used to living on what you can afford. As you move up, you can afford more of your wants. This is how people end up making lots of money and not being able to save. As soon as they make more, their lifestyle grows with their paycheck. Don’t make this mistake if you are serious about Financial Independence. Evaluate your needs versus wants again. Decide which new expenses are truly necessary. Increase your savings or investments with the rest.

That’s it! All of my Top 11 things I would advise 20 somethings to do for Financial Independence.

If you found this advice helpful, feel free to share. And of course, subscribe for more great tips. Or follow us. 

Written by leahb

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