10 Financial Commandments for Your 20s
4.30.09
10 financial commandments for your 20s, courtesy of Kiplinger’s.
1. Plan ahead – Time is on your side. When you are young, you have a super-power that no one else has – the opportunity of compounding interest.
2. Live within your means – Get on a budget. It will enable you to be proactive, instead of reactive.
3. Make saving a habit – Set goals – saving for a computer, a home, or even a house. Practice setting obtainable goals and reaching them. Developing this skill will ensure finance success.
4. Pay off your credit cards – If you can learn #3, you won’t need credit cards anymore. If you can rid yourself of the credit card debt and get over the hump (learn to pay cash instead of credit), opportunity will abound.
5. Start investing – The best place to start is retirement investing. Your employer will most likely guide you through your 401k or (even better) Roth 401k. Dave Ramsey suggests putting 15% into retirement. Do this and you will retire a wealthy person.
6. Establish credit – I disagree with this ‘commandment’. Don’t fall victim to the FICO. It is bush league. You CAN live without it.
7. Develop a marketable skill – Earn-Spend=Save & we write a lot about the ‘Earn’.
8. Cut the financial umbilical cord – If you are in your mid/late 20′s and still on the umbilical cord, chances are you might have to cut it yourself. Mom & Dad may like having you attached, but years from now, you will regret it.
9. Marry wisely – Marry Only Once.
10. Have some fun – That’s what personal finance is all about.
