10 Lessons I’ve Learned (So Far) about Money in My 20s

by Michelle Jackson

At 25 years old, I am halfway through my twenties. I have come a long way from my 20-year-old self, when I mostly spent money on clothes, books, takeout, and expensive desserts while living in New York’s East Village. While I know that I am privileged, as my parents financially supported me through college and I still live at home, I have also had to learn to be fiscally responsible.

1. Save as much money as you can.

Saving is hard, period. This is true for everybody, but especially for people who are 100% on their own, and must deal with significant expenses—rent, car payments, insurance, healthcare, utilities, groceries, and more. However, when and if it is possible, setting money aside—however small and insignificant the amount seems—can and will be well-worth it in the long run. It is good to both contribute money for an “emergency fund,” as well as towards a goal, like a vacation, new furniture, or whatever else will keep you motivated.

2. Do not touch your savings.

Learning to set aside money in a savings account versus not touching your savings are two separate lessons. Seriously. Although I started saving when I was 20 years old, I did not master the art of actually leaving that money alone until I was 24 years old. Instead, it was a constant cycle of deposit and withdrawals. I often wondered why I was even “saving” in the first place. It took discipline, but I was finally able to realize that my savings was not a way to make up for living outside of my means. The only exception to this is if you are saving up for towards a goal and have reached it—like a plane ticket for vacation or buying a new car.

3. Set up a reasonable monthly personal budget.

Although I live at home, it was important to me that I set up expectations of how I would hold myself accountable for my money. There is not a day that goes by that I am not appreciative of my parents’ support, as they know economic realities for recent college graduates are much different than when they were my age. And on top of that, I am in the middle of a career change. However, I wanted them to know I would never ask them for money. This meant setting up a reasonable monthly budget to provide a general guideline of how and where I would spend my income. Thus, I’ve been able to practice some financial independence in preparation for when I do finally move out on my own.

4. Be careful with credit.

We have all heard the warning about credit cards. And still, some people ignore these warnings altogether. The only reason I have never gotten myself into extreme debt is that I have a healthy (or maybe irrational) fear of it. To date, the only outstanding debts I have are my student loans, and a substantial credit card balance that I could still pay off if I really needed to. While I recognize that I may not always be this lucky, I make it an active practice to keep my debt manageable. Credit is something that stays with you for years, even after you have paid off all your debts. You don’t want a few mistakes in your twenties to be the reason you can’t get a home, business, or car loan later in life.

5. Pay your bills on time.

I once thought being a couple of days late on a payment was “no big deal.” Now I realize that shit ain’t cute. Luckily, I got wiser… and made better use of technology. Now I pay most of my bills through recurring, automatic withdrawal or debit charges.

6. Don’t let other people make you feel guilty about how you spend your money.

For a time, I would feel really guilty about how much I spend on cable TV, high speed internet, and dining out package due to my friends’ reactions. They would often make comments like, “Must be nice!” or “Well, that’s because you live at home and don’t have expenses.” Now, I silently tell these people to kiss my ass. I spend my earned income on things I feel I deserve. If people want the right to comment on my expenses, they should offer to bankroll my lifestyle.

7. Track your spending.

I am almost obsessive compulsive about tracking my spending. I check my online banking account a few times a week and use a personal finance software that not only tracks my monthly spending, but analyzes the data for me. This has allowed me to alter my spending habits, slowly but surely.

8. Stay on top of your taxes.

In the last year, I have learned more about taxes than I ever wanted to. (I am also slightly more sympathetic with the Republican view on taxes.) Although I am perfectly content with letting someone else do my taxes for me, I still think it is crucial for people to have a basic understanding of what taxes they owe, as well as when and why they owe them.

9. Be generous when you can afford to be.

I do not donate in the traditional sense. But every once in a while, I try to give funds and resources to people, projects, or causes I want to support. This is my small way of “paying it forward” in acknowledgment of the many blessings I have.

10. Treat yo’ self!

When I decided to leave my full-time job in the non-profit world to focus on building a writing career, I made all kinds of strict rules for myself and my spending. That lasted no time at all, because only an ascetic monk would have been able to keep them up. Instead, I have had to continually reevaluate my budget and practice moderation. But I also realized that treating myself from time to time keeps me more motivated to stay on top of my finances. This both  small indulgences—like buying a $7 slice of pie from my favorite bougie bakery—to big splurges like taking a cross-country road trip with a sistafriend. I mean, if we earn money to live… why not live well?

Michelle Denise Jackson is a writer, performer, and storyteller from Southern California. She has performed her work in Southern California, New York, New Jersey, Michigan, and Washington, D.C. For more information, you may visit her website at www.michelledenisejackson.com.

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