5 Financial Lessons Every 20-Something Should Learn

If you’re in your 20s, it’s not too early to educate yourself about personal finance. Unfortunately, most colleges and high schools don’t offer mandatory classes on the subject. That’s why so many people grow up somewhat financially illiterate. Fortunately, that can change with a little bit of self-education.

Here are 5 lessons every 20-something should learn.

1. Understand Your Debt

Chances are pretty good that you’re dealing with a significant amount of college loan debt as a 20-something. On top of that, if you’re like the average person in your age group, you’ve probably splurged a bit using credit cards. It happens to the best of us.

You need to get a full understanding of how much debt you have, how long it’s going to take to pay it back, and how much you can afford to put towards debt relief every month. The good news is that this is something that can be done with a spreadsheet; no need to hire a financial advisor.

Once you’ve got a handle on your debt load, determine how much you want to put towards that debt every month so that you can finally pay it off. Obviously, you’ll have to pay the minimums required by your creditor. However, if you want to get out of debt sooner, run the numbers to see what you can afford.

2. Use Your Mobile Device to Manage Finances

If you’re anything like the average person in your age category, you love your mobile device. You use it to text, check your social media feeds, and talk to your friends.

You can also use that mobile device to help you with your finances.

There are countless apps on the market, many of them free, that you can download and use to manage your money. They’ll also help you build your emergency fund and show you the progress you’re making towards other financial goals.

3. Check Your Credit Score

Fortunately, there are plenty of free places to check your credit score online. You’re going to need to know how the credit bureaus (and, ultimately, lenders) view your credit history if you ever expect to receive a loan.

If you’ve been late with some payments in the past, don’t stress over it. Just keep up with your payments going forward and your credit score will recover.

4. Start Saving

You might think that this is the decade you’re supposed to have fun and party all the time. You don’t need to sacrifice all of your social life, however you do want to make sure you’re also putting money away for retirement and an emergency expense.

5. Get in the Habit of Saving

You’re developing “adult” habits that you’ll carry through your entire life. One great habit you should cultivate is to always look for ways to save money. Use rewards programs. Clip coupons. Compare prices for big-ticket items online.

If you develop a habit of saving, you’ll put thousands of extra dollars in your pocket over your lifespan.

As a 20-something, you have almost all of your adult life ahead of you. Make sure you enjoy that life by making wise financial decisions.