9 Things Every Smart 20-Something Absolutely Should Be Doing With Their Money
Somewhere at the intersection of responsible spending and #TreatYoSelf culture are all the Millennials, still high off the rush of that first post-collegiate paycheck and at something of a loss over what to do next. It's not like we haven't been told how to handle money before, it's just that the game has been changed. Your 20s is a uniquely weird time: You're possibly making some steady money for the first time in your life, and more than likely are not yet responsible for the upkeep and maintenance of actual children. The combination of "more money than when we were kids" and "fewer responsibilities than older adults" means we can suddenly afford the brunch-filled, Fitbit-owning, impromptu weekend getaway lifestyle of our (OK, pretty sadly modest but still) dreams. And while it makes sense to want to spend money on those things now, before we get to an age when those hypothetical responsibilities kick in, we also know deep down in our YOLO-hindered souls that it would be a smart move to start saving for our futures.
I feel like we need to talk about making smart choices about money at this point in our lives, especially since so many people actually go around telling 20-somethings to spend with reckless abandon, saying that this is the only time when we'll have both the financial ability and the freedom to do all the things we want. If you clicked here looking to read one of those articles, you're out of luck. I do believe that we should take risks at this point in our lives, and yes, there are occasionally experiences we will have that will cost us a lot and end up being worth every penny, but the people who say to blow all of your money when you're young are wrong for so many reasons, chief among them is the notion that adventure ends one you hit 30. There will always be time to have rewarding experiences.
Have I sucked enough fun out of the world yet in one paragraph? Here's the thing: This isn't an either/or situation. I think you can live your 20s to the fullest and get all your kicks in, but still be financially smart about it. If Hannah Montana had survived 2010, this would be her new interpretation of the "Best of Both Worlds." Make an effort in 2015 to be mindful of what you're spending, fellow 20-somethings, because this is where your money should go:
Pay for hostels, not hotels
Look, guys. We're in those glorious years between infancy and senior citizenship when our immune systems are the strongest they'll ever be, aka, The Hostel Years. We have not lived enough of our lives to go on big extravagant European adventures, and besides, you barely get a true cultural experience or a sense of companionship while traveling all fancy-like. Stay in hostels, travel in groups, or go backpacking if you are ambitious enough. You want adventures and crazy stories you can use to scar your grandkids for life? Believe me when I say this is how you should travel for now.
Buy a few expensive things that will last for a long time
You need one nice down coat, one killer pair of jeans, and one pair of boots that you can throw on with anything. Make these choices carefully, and then stick to them for the next few years. You'll end up saving money in the long-run by not needing to replace them.
All the other clothes purchases you're making? Ask yourself if you really need it. Walk away from it for a little while. If you are in the parking lot of the mall and it is still calling for you, then yes, sometimes it is worth the splurge and you just have to have the thing. Other times, you will forget about it the minute you leave the store, so you know the gratification you would have felt from buying it wasn't bound to last long anyway.
Share appetizers at restaurants with friends instead of buying meals
The older generations are constantly commenting on how we go out way more often than they did at our age, and they're right, we do. It's our way of staying connected with our friends and solidifying relationships, and we not only look forward to it all week, we make some of the best memories of time spent together while out sharing overpriced food. I see no reason to issue a blanket ban on going out to eat for money's sake, but we should be smart about it. By sharing appetizers, you spend way less money, you have an infinitely more fun sense of community (sharing is caring!), and everybody gets to feel adventurous at a new restaurant without over-charging their credit cards and wrecking their credit scores. If you're still hungry, eat when you get home.
Save all of your loose change
There is a jar full of loose change I've had for many years now, and I cannot tell you how many times it has come in handy. I have no idea why people in general are so dismissive of loose change. Either use it to tip, or put it in a pocket of your wallet that you will remember to drain into the jar at the end of the day. Your future self will thank you when you need it for meters, laundry, highway tolls, or even in those desperate moments when you are broke as all hell and you have just enough quarters to guiltlessly buy one fancy coffee and regain your will to live.
Buy Netflix and Hulu subscriptions, skip cable
The Comcast representative is going to beat your eardrums into their last shred of humanity convincing you not to pull the plug on the cable that comes with your internet package. Ignore them. You will save HUNDREDS of dollars per year. All cable will really do is act as an enabler for you to turn the TV on and mindlessly watch it when you could be getting important stuff done. Deliberately deciding which shows you actually want to watch and loading them up on Netflix and Hulu will at least give you some semblance of control over what you're watching (or let's just pretend it does).
Save your receipts and SAVE YOUR WARRANTIES, FOR THE LOVE OF GOD
We are too old and too broke to be shrugging every time an expensive piece of kitchen gear breaks just a few months after we've bought it. If anything wears out on you too fast, no harm can come out of contacting the seller. More often than not, you will be eligible for some kind of compensation. And when the rent is due the next month, you will be damn happy you spoke up about it. (Also vaguely related, when your shirts and sweaters come with extra buttons, put them in a drawer somewhere. Clothes that come with extra buttons are usually expensive ones and you will be super sad in a year when one pops off and disappears and you didn't save the extra one.)
Keep a log of the things you spend money on every day
Groceries add up hella fast. You can trick yourself into thinking you've barely spent anything this month and then SURPRISE—There's 200 dollars on your credit card balance you totally forgot about. Stop the bill paying shock and help yourself save some money by writing it in your planner. It will be brutal. It will feel unjust and unfair to stare at the inked version of your Starbucks addiction. Do it anyway.
Donate money to something you believe in
Remember when we were kids, and we saw ads on television about charities and were so bullheaded about wanting to help we made lemonade stands or roped our parents into donating on our behalves? We are still those kids, and now we have money to do it ourselves. If you are financially stable, you are among the lucky ones—pay it forward. Even a few dollars here and there counts toward something much bigger.
And finally, save some of your money (duh)
The best, simples breakdown of how your money should be spent is this: 50/30/20. Fifty percent of your income should go toward essentials (rent, utilities, insurance, gas); thirty percent is for flexible spending (groceries, entertainment, tech); twenty percent goes into a savings account and stays there. You don't need to be told that emergencies will happen, not just in your life but in loved ones' lives, and you're going to need that extra cushion to either help yourself or help your family. And if you don't end up ever needing it for an emergency, you'll have something saved up for the many exciting and epic years beyond your 20s. They do exist—and they are coming for us sooner than you think.
Images: NBC; Giphy (7)