Giving financial advice for young adults feels like yelling into an empty cave. Is anyone listening?
Because really, in your 20s, the sky’s the limit and you’re chasing your wildest dreams.
But in reality, no one likes making mistakes. Mistakes hurt. They’re painful. And sometimes they can last a lifetime.
But if you’re able to get serious, and realize it’s the only life you get to live (YOLO!), you should take precaution.
Especially when it comes to money and finances, we desperately need advice from those who have gone before us.
So whether you’re a young adult, just out of college, accepting your first job, now is a perfect time to get good with money.
Financial Advice for Young Adults – Time is Now
Money has this power over people that leaves consequences until the future. We believe our money problems will go away, simply because there will be more money in the future.
This is a horrible outlook, and a self-defeating prophecy. If you wait to address your issues in the future, it will always be bad, it will always get worse.
The best time to fix your money problems is now. Trust me.
Financial Advice for Young Adults – God’s Advice
There’s a parable in the Bible about talents. Those who use their talents and invest wisely will be trusted with more in the future. Those who hide their talents and don’t use them will have them taken away.
Don’t take this parable out of context, however. It has nothing to do with money. It’s about your God given responsibilities and glorifying His kingdom.
Even though the Bible isn’t talking specifically about money (and please note, God doesn’t care if you’re rich or not), there is a direct correlation to how you behave with a little money, is also how you’ll treat lots of money.
Financial Advice for Young Adults – Broke
If you feel broke now and are living paycheck to paycheck, having more money won’t fix this problem – it will defiantly make it a thousand times worse. I pray to God you never receive a large chunk of money because it will only ruin your life. Like death ruin.
Or there are the professional athletes who enter retirement in bankruptcy. There’s plenty of examples here and here.
So ask yourself, do you really want to inherit wealth beyond your means? Sure, it would be fun for a second, but then what? You’d be broke and miserable. You’d come out of that experience worse off than when you began.
Thankfully, there are steps you can take to prevent such a catastrophe. You need to get good at handling finances now.
Financial Advice for Young Adults – 3 Steps
This financial advice for young adults is aimed at people below the age of 40. Not that you can’t use this advice at any age, you should be after different goals closer to retirement.
There are 3 essential money skills to master, they are to set a budget, eliminate debt, and save. I talked more about these financial skills here, but it’s worth repeating.
Budget – A budget is important because you need to tell your money where to go. If you’re spending money like a crazy person and have no idea where it’s going, you’ll never be able to save or eliminate debt. The budget is the first step to mastering money. It also feels terrific to be in control of your money too, rather than being a slave to it. For further advice on a budget, check this out.
Debt – As a young person, the best thing you could ever do is to never open a credit card. This is entirely counterintuitive to the world’s view, but the world can suck it. You don’t need airline miles or cashback programs either. These are traps to suck you into a horrible web, which you’ll never escape. Trying to escape the debt trap, and to change bad habits, as a 40 year old, is much harder to correct than for a young person. Just get in the habit of paying cash everywhere and you’ll be light-years ahead of your peers.
Save – You need to become a saver. Once you’ve set a budget and eliminated debt, your money has nowhere else to go except into savings. And this doesn’t mean just sitting around in the bank collecting dust. Once you have solid saving habits, you’ll be able to pay off a house and begin investing. That’s where the real wealth creation begins.
So as a young adult, hopefully you can take these tips to heart and implement them today. Take it from people who have gone down that road and struggled with a lifetime of financial stress. Don’t end up like them. Take control of your money problems today.
Financial Advice for Young Adults – Action Steps:
- No debt
How do you feel about budgets? Do you feel like a financial rookie? What advice do you wish you received at a younger age? Who can you share this money advice with?