- Avoid credit card debt. I am not anti-credit card but people do need to use them properly to keep a good credit score while not digging themselves into a hole of debt. My advice would be to get a few credit cards and use them regularly. Make sure you have the cash on hand to pay off these cards each month so you don't pay interest and you don't get mired in revolving debt.
- Only borrow what you need for an education. My advice would be to not borrow anything for a college education. Go into the military, apply for every scholarship you even remotely qualify for, cash flow your way through community college, and/or get a job that helps pay for your education...whatever it takes to end up with zero debt when you get out of college. College loan horror stories are much too easy to find online so avoid this trap all together.
- Be careful about borrowing anything else. I would definitely save up and pay cash for a car instead of getting an auto loan, I would avoid payday loans and rent-to-own places like the plague, and again, if you need to buy a sofa or something, save up the cash, buy the sofa with your credit card, then pay off the card before the next payment is due.
- Pay attention to your credit. Obviously everyone should pull their free credit reports annually to make sure there are no mistakes and, as I recently learned, check your credit cards online every month so you don't miss any surprise charges.
- Pay your bills on time. This is a no-brainer. Never pay late fees and avoid bad marks on your credit report by always paying your bills on time.
- Open a checking account on your own. Everyone should open their own financial accounts as soon as they turn 18. Of course, don't overdraw these accounts or otherwise mess them up or you could lose the ability to have a checking/savings account!
- Open a savings account. See #6 above, and additionally, save 10% of every dollar you ever make to give yourself a nice financial cushion in your old age.
- Open a retirement account. See #6 above, and again, if you save another 10% of every dollar you ever make, your retirement will very nice indeed. Also, take advantage of any employer who will either add to your retirement account and/or match your retirement account deposits.
- Learn about investing. Definitely do this. In fact, many high schools and colleges have investing clubs where you can learn about investing and share information with others about the topic.
- Purchase life insurance. IMHO most young people don't need life insurance unless they are married and/or have kids. As long as you have enough money to pay for your untimely death in savings, that's all you need.
- Develop a marketable skill. Yes yes yes...this so much. Work is all about having a marketable job skill (skills that are in demand and that employers/customers will pay you good money for). Anyone can flip a burger, not everyone can provide dental services, drive a semi, or weld underwater.
- Consider a side hustle. Years ago this was really common. Every kid in the neighborhood made money doing everything from babysitting and mowing laws to delivering newspapers and even modeling on the side. Having the ability to side hustle some money when needed is a valuable skill indeed.
- Give to others. I am a big fan of tithing and volunteering to help those in need. I am not a fan of just giving money to other people unless it is a gift as loaning money usually doesn't end well.
- Start building a network. Even learning social skills and communication skills will go a long way towards increasing your income potential.
- Establish your priorities. Having financial goals is a great idea but if you can't think of any spending goals that's OK too, just keep saving then when you determine a big goal, you will be well positioned to achieve it.
- Create a spending plan or budget. Everyone should have both a budget (how you plan to allocate your money) as well as a way to track your spending (a great way to see where your money actually goes so you can make tweaks to your spending if necessary).
- Talk finances with your significant other. Obviously this isn't necessary if you are just dating (and by all means do not tell every person you know how much you have in savings and investments!). While dating you will have a good idea of how your SO handles money and when it comes time to get married, you definitely want to lay all of your financial cards on the table and ensure you are both on the same (financial) page.
- Get used to saving up for big purchases. See above, you want to have the cash on hand for most things you purchase, the only thing I would recommend going into debt for is a house in which case you would need to save up for the down payment.
- Learn to cook. This is a huge money-saver. Buying and cooking cheap ingredients is much less expensive than eating out everyday (healthier too!).
- Learn to say no. Say no to loaning money, say no to timeshares, say no to "trendy" purchases, say no to things you can't afford, etc.
And five more of my own tips:
- Pay to take care of your health in your 20s. Eat healthy food, get your teeth cleaned and examined regularly, don't participate in risky behavior, etc.
- Chose the people you hang out with wisely. Gang bangers will get you shot, scammy people will try to steal your money, addicts are just bad news all the way around...
- Pay less for stuff and more for experiences. I'm a big fan of minimalism so that I can spend my money on travel and knowledge and other great experiences!
- Avoid scams. MLMs and time shares and subscription services that are impossible to get out of...there are a lot of scams out there so you need to protect yourself and your money from these.
- Enjoy your money. People are so stressed out about money but by spending your money on things you absolutely love it can bring a lot of joy into your life!
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