Look, try not to feel bad about money, my fellow 20-somethings. Just because Grumpy Cat made a cool one hundred million bucks before his second birthday doesn't mean that you're too tragically behind the curve in your attempts to achieve financial stability, even if you're broke as broke gets right now. You may not have an adorable meme-worthy underbite and ridiculously large kitten eyes, but you do have an otherwise solid head on your shoulders that is fully capable of summoning common sense, even in the dollar section of Target. If you've got some basic money knowledge under your belt by 25 years old, you're already way more set than you think you are.
Fortunately for our little brothers and sisters, high schools now are starting to require kids to take a finance class, but those of us who didn't have one have learned on our feet. I've been handling money now for a while now. I'm not just talking about my own moolah, but also through working retail and as an office assistant for a rapidly-growing small business in my early 20s. I've seen the way people spend and save their money. I've picked up incredible valuable tips—and acquired a few financial horror stories—along the way. Here's what I know, and honestly, I'm not sorry if you've heard these things before; that's my hope, actually. Because you should know these things, as should everyone by the time they reach the age of 25.
The 50/30/20 Rule
You've probably heard something along these lines, but it's worth emphasizing anyway. According to the 50/30/20 rule, 50% of your income should be devoted to necessities like rent, insurance, and utilities, 30% should go toward groceries, entertainment, and any other nonessential spending, and 20% should stay untouched in your savings.
What a CD is
Again, something a lot of us already know about, but you'd be surprised by how many blank looks I've gotten from people about this. I don't mean "CD" like the Michelle Branch one that used to (OK, still does) grace my Hello Kitty boombox, I mean the Certificate of Deposit you can put in the bank. It's a form of savings where you put money away that you can't touch for an amount of time, usually a period of a few years, and it accumulates money. Sometimes it's a ridiculously small amount, but even then, it's nice to have the cushion.
Which credit card program rewards program suits you best
This is especially important as we get older, and start making bigger purchases on our credit cards. Every program has a different rewards system. Some of them are based on purchases like gas and groceries, whereas others are based on travel mileage or entertainment spending. By 25 years old, you should be able to evaluate your habits, and have a solid enough awareness of your lifestyle to decide where you want or need those kind of perks, and to make sure that the rewards you're building are meaningful for your future as opposed to, say, just getting a fifty dollar gift card to Macaroni Grill once a year (guilty as charged).
Everything is cheaper if you look hard enough
If you don't have these sites bookmarked by 25 years of human life, go ahead and click now:
1. RetailMeNot, which gives you all sorts of current deals on everything from clothes to food
2. SkipLagged, which has revolutionized cheap travel (and also earned its 22-year-old creator a lawsuit from United).
3. SlickDeals, which is similar to RetailMeNot but includes a lot more deals on tech
Also, guys, listen because this is about food so it's important: Papa Johns has a perpetual coupon for 25% off delivery orders, if you just google whatever the current promo code is, so please, for the love of God, stop paying full-price for delivery pizza. THIS SHOULD NEVER HAPPEN TO YOU.
Write down what you spend. Just do it. There are no shortcuts.
This is like the financial version of taking pictures of everything you eat: it is excruciating and you will hate every second of it, but it will keep you honest. It's the difference between "oh, I only eat a whole package of cookies, like, once a month" and "oh sh*t, I did that literally 6 times last month." The same thing can happen with your needless spending. And by 25, you can appreciate the relief of knowing exactly what's coming for you when you pull up your online banking statement.
You should be saving money for retirement now. No, seriously, right now.
I know it sounds like a bazillion years from now, but the truth is, it's not. At 25 you've got, on average, about 40 years to save up for retirement, which should ideally be enough that you don't have to go back to work. Sure, there's social security, but you should have your own funds to fall back on. Some quick math will show you just about how much you should be saving per year to reach whatever that goal is.
Resist the ugly lure of the credit card's power
Unless you are in a genuine emergency, it's just plain not worth it to overextend your credit. You're going to get bitten in the ass with interest and it may take years to pay off whatever debt you accumulate. It's important to have a credit card both to establish credit and turn the money you spend into useful rewards, and by age 25, you should know not to test its limits any further than that.
Don't waste money on junk
Go ahead and venture into your closet right now, or open a dresser drawer, or even just do a quick scan of the room you're in: You already know that there are plenty of things you wasted money on that you totally could've lived without. There are so many things that you barely even think of even unless you see them; There are so many things you've probably completely forgotten about. By your mid-20s, you should be able to discern whether you're buying something out of genuine love for what it is, actual need, convenience, boredom, or just the lust of making a purchase in the first place.
Insurance is a necessary evil
By now, you're old enough that you should know if you are lucky enough to be able to afford it, you should never skip out on car, home, or health insurance. You are basically just tempting the universe otherwise. It is a pain in the neck to pay at the time, but if the need ever arises, you will be glad you put all the effort into keeping it.
Automate your savings
The easiest and most surefire way to save money? Have it automatically pulled from your paycheck every week. It's easy to set this up through your bank, and then you never even miss it. The only thing better than finding ten dollars in your raincoat pocket is finding ten thousand accumulated in your savings account. (Think of how many pizzas you can buy!)
Be happy with what you have
I think we all have a tendency to get really worked up about our finances, even when we're doing just fine. It's totally valid to be ambitious and try to make more money and save it, but you should also learn in your twenties that it's not worth putting a tremendous amount of stress on yourself if you're living well already. The best parts of your life have nothing to do with money, anyway.