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Money in my 20s

Last Updated: December 7, 2014 BY Michelle Schroeder-Gardner - 35 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

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Happy Friday everyone! This week went by pretty quick for me thankfully.  I have a pretty packed weekend (but it’s mostly fun stuff) so it should be a good one!  I hope everyone has a great weekend also.

I believe that how you behave in your 20s with your money can definitely change everything. If you start investing, saving, paying off debt now, then you are preparing yourself for retirement at a great time.  Compounding definitely plays a huge factor in starting young also. If you save $1,000 a month for the next 40 years, then at 6% interest you will have

$1,968,572

But if you wait to save until 20 years later and save $2,000 a month in order to catch up, then after 20 years at 6% interest, you are only at $935,825. BIG difference right? The time value of money definitely plays a big part in this, so the younger you can start, the better!

There are many things that I’m doing now to prepare myself for my future. This involves, my spending habits, budgets, schooling, my career and so on.

What I’m doing:

  1. Went to college and graduated with two undergraduate degrees. This helped me a lot when I was applying for jobs and I also feel more rounded (even though both degrees were business related). I wouldn’t be able to be in my field without my degrees.
  2. Working on my MBA. This will help me with my career and also a higher salary with more opportunities.
  3. Secured a good career. My job is very stable and will if anything grow by an exponential amount. There aren’t too many people who do what I do.
  4. Advancing in my career. I’m working on my credentials and I should have them this summer as well. I just have to take one more test and turn in sample reports (these are extremely long). I need to start working on my sample reports soon.
  5. Live within my means. This one is different from the others that I just listed. Living within my means is something I do, but also something I could work on.
  6. Paying off my debt. This is a big one! I hope to have my student loans completely gone by next year and then my house to be paid off in less than 5 years from now. WHOO HOO for goals.

I also have a fully funded emergency fund. My job is pretty secure, but you never know if something might come up. With an emergency fund I don’t have to worry as much and worry about living paycheck to paycheck.

One thing I DO need to start concentrating on more is investing. I know a decent amount about investing and finance (I am a Finance MBA major and I work in the financial services industry), but I’m still unsure of how exactly I want to allocate all of my investments. And until I’m positive that I understand everything (hey I have an investment mind just like Buffet, maybe one day I’ll be a billionaire, ok probably not), this is kind of hindering how deep into investing I’m getting.

Another area I would like to work on is getting a more stable side income. Maybe blogging? I’m still not sure. I have so many ideas floating around in my head though.

Of course there are many things I want to do in my 20’s also. I don’t want to look back on my life and feel like I missed out on anything. As I’ve said this whole week, I budget and watch my spending so that I can do the things I love in life.

In my 30s, I’d like to do a lot of things. It just seems so crazy to think of myself 10 years from now! I’d hope to have a family, no debt, great investments and lots of world travels. In my 40s? Not really sure. I haven’t thought about my life that far ahead honestly. I would hope to be able to retire early though.

What are you doing to prepare yourself for your future? What do you wish you would’ve done?

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35 Comments
Filed Under: Budget, Career, Debt, Extra Income, Life Tagged With: Extra Money, Life, Money

About Michelle Schroeder-Gardner

Michelle is the founder of Making Sense of Cents, a blog about personal finance and traveling. She discusses how her business has evolved in her side income series. She paid off $40,000 in student loans by the age of 24 mainly due to her freelancing side hustles. Click here to learn more about starting a blog!

Comments

  1. Liquid Independence says

    March 9, 2012 at 2:23 am

    I've made so many mistakes investing, but it's also one of the quickest ways I've become better at it. Good luck with your sample reports.

    Reply
  2. House of Sykes says

    March 9, 2012 at 3:36 am

    Beginning in July of this year, our debt will be paid for and we will be able to save $2,500/month. We plan to invest that money in a mutual fund at approximately 7%. In 7.5 years (year 2020), our savings plus the compounded interest will give us $310,000. We plan to use half of that to build our forever home. We will save the rest of it for our future. Having a plan in your 20s is CRUCIAL. We are 26 and 28 and just four months away from being debt free. You may be sacrificing some things that you want to do now, but I don't believe you will regret it when you're retired at 55 and the rest of your friends HAVE to work until they're 65. 🙂

    Reply
    • Michelle P says

      March 9, 2012 at 7:59 pm

      That's a great plan!

      Reply
  3. Michelle P says

    March 9, 2012 at 4:35 am

    I have a B.A. in Management and a B.S. in Business.My business degree was more economics focused whereas Management was more finance-executive focused.I was a dual major so they are closely related but it looks good on my resume when I can list two haha

    Reply
  4. The Stoic says

    March 9, 2012 at 4:42 am

    Unlike you I didn't have the sense to save early, now that I'm in my late 30's I'm saving like gangbusters to make up for that lost time. Live and learn eh?

    Reply
  5. Becky Borgman says

    March 9, 2012 at 5:01 am

    When my husband and I were engaged I thought he was CRAZY for how much money he wanted to put into retirement and other accounts each month. I would also become annoyed when we were first married and putting furniture on credit (even at 1.9%) was not an option for him. Now, as we are getting closer and closer to being debt free (he is an eye doctor, I am an occupational therapist so our student loans are pretty high)and paying cash for our new car, I am so thankful he had more discipline than I did. And now, because of this, I won't have to work full time when we have children and we will not have to worry about our future.

    Reply
  6. lora kathleen says

    March 9, 2012 at 5:14 am

    I wish I hadn't gotten into debt over silly things, but glad that I'm still young enough for it not to be hugely damaging.Once I pay off my debt, I'll funnel all that money into my savings/retirement accounts to hopefully make up for lost time!

    Reply
  7. Modest Money says

    March 9, 2012 at 5:17 am

    It sounds like you've really got your finances in good shape Michelle. I wish I was so responsible in my twenties. Instead I bought and expensive car, lived in a pricey apartment and wasted money on nice restaurants. I definitely didn't invest enough. So I'm going to have to change gears and work hard at saving now.

    Reply
  8. Live Simply- Live We says

    March 9, 2012 at 5:40 am

    I wish I would have invested with some sort of direction. When I got my first job I just guessed. I knew I wanted to save but didn't know how. So I just threw money at a Ira and 401k and hoped it would grow. This year we met with an advisor. I wish I had gotten help sooner.

    Reply
  9. debtntaxes says

    March 9, 2012 at 6:12 am

    We are working on paying off our debt, which should be gone by the end of the year other than our mortgage. We have a goal of paying that off in under 10 years which would put me at 37. I wish I would of saved more for a downpayment before we bought our home. Should of been saving more towards retirement before also, but that is something that we can increase as we go a long.

    Reply
  10. Well Heeled Blog says

    March 9, 2012 at 6:34 am

    I wish I would've bought Google stock in 2005! LOL. I am also getting my MBA, trying to work on my career. I intend to have a dual income household so we have some cushion in case of layoffs, etc. Of course, saving as aggressively as we can for retirement, and this isn't only driven by finances, but it's probably going to help us – we only plan to have one kid if we have kids at all.

    Reply
  11. BrokeElizabeth says

    March 9, 2012 at 6:47 am

    Right now I am reading as much as I can on personal finance, and being very careful about how I spend my student loans. If I took out the full amount I am eligible for, I could potential graduate with over $100k in student loans, but I'm trying to make it with under $30.

    Reply
  12. Laura Vanderkam says

    March 9, 2012 at 8:37 am

    Good to see you're using 6% as the assumed return, rather than 10% or 12% like people often do. I've been reading some arguments different places looking at demographic trends in different developed countries, and what that does to stock market returns over a period of 20+ years. Let's just say it doesn't look good for getting any 12% returns anytime soon. But as you see, at 6%, if you start early and save a lot you'll wind up with quite a bit.

    Reply
  13. Alice @ Dont Debt says

    March 9, 2012 at 10:05 am

    What am I doing to prepare for my future? I'm working on paying down my debt. Four years to go! What do I wish I had done differently? Almost everything. Seriously, most of my adult life could be the subject of a book on what not to do financially.

    Reply
  14. shopping2saving says

    March 9, 2012 at 11:06 am

    Right now I'm 24 and I feel like I am on a good track to building my life. I wish I could spend more on fun stuff like traveling but saving is first and foremost important to me, and I want to own an investment property, and then save up for my house. Next up, a wedding! I want to look back on my 20s and be able to know that I didn't give up, I went for every goal I had and worked as hard as I could. I'm hoping that with all of these sacrifices, I will be able to live a comfortable life later and also travel (hopefully before I have kids!).I started saving for retirement when I got a job at 22. I wish I had learned the art of saving sooner, but I am glad to have started early-ish.

    Reply
  15. MyCanadianFinances says

    March 9, 2012 at 11:09 am

    I am currently 21 and in my line of work I am eligible for a pension after 25 years. Unless something drastic changes I will definitely be staying with my current job. After I pay off my debts I will be able to put away $500 a month. I feel that this is a great start.

    Reply
  16. End The Insanity says

    March 9, 2012 at 11:24 am

    Hi,I'm sorry for whatever I did that offended you.If you ever feel like reading/posting on my blog again, that would be nice.

    Reply
    • Michelle P says

      March 9, 2012 at 11:54 am

      Just left a comment detailing how I feel.

      Reply
  17. Paul @ Make Money Ma says

    March 9, 2012 at 11:51 am

    Finishing school in May, moving to the next step in my career, then going back to school.Thanks for your thoughts on your job!

    Reply
  18. Ella says

    March 9, 2012 at 11:58 am

    I wish I never got into debt and I wish I had had a more frugal lifestyle when I was in my 20's… But well I did learn my lessons at least 🙂

    Reply
  19. Stesha says

    March 9, 2012 at 12:03 pm

    this is a great post! I have a retirement fund that i have had since the day i turned 18 – now i dont put 1000 in a month but i do put in an amount…. lets pray I am rich when I am older!!xxoo

    Reply
  20. Mackenzie says

    March 9, 2012 at 1:02 pm

    I wish I had saved more money in my 20's definitely. I think of all the money wasted and it just kills me! 🙁

    Reply
  21. James says

    March 9, 2012 at 1:08 pm

    I just started to take my credit card debt seriously and I hope to have it all paid off by the time I am 25. Then I plan to focus more my future as far as saving for retirement. I think my friends are crazy for not being more mindful of their debt!

    Reply
  22. American Debt Projec says

    March 9, 2012 at 1:33 pm

    You're going to rock out the rest of your 20s and blow your 30s away with those great habits/actions. Wish I'd known more people like you in my early 20s. But better late than never 🙂

    Reply
  23. Emily w/Amazing Grap says

    March 9, 2012 at 2:27 pm

    Whew! you sound like you have a lot already figured out for being in your early 20's. That's wonderful. I remember being told something similar to the $1000 a month idea, and its a great thing to do.Sounds like you'll have little problem maintaining your goals! Emily at Amazing Grapes

    Reply
  24. Anthony Thompson says

    March 9, 2012 at 2:37 pm

    You're very fortunate to begin your savings endeavor in your 20s. The earlier you start, the more you can, and the more money you'll be able to live on in your golden years. It's such a shame that this isn't part of curriculum in middle school, because more people would be in a better financial state. In any case, kudos to you, and good luck with your great savings strategies.

    Reply
  25. Shilpan says

    March 9, 2012 at 4:36 pm

    You are ahead of 99% of youngsters in terms of your overall life goals. You are showing maturity of someone in middle age in your 20s. Kudos to you!

    Reply
  26. Lindsay [Bella Cene& says

    March 9, 2012 at 5:35 pm

    Great advice! I have a 401k right now but i have a lot of student loan debt to pay off. Unfortunately, I spent more on my education than I make in a year currently. It's frustrating but hopefully things will turn around! Question – how did you become so involved and interest in finance at such a young age?

    Reply
  27. MyMoneyDesign says

    March 9, 2012 at 6:22 pm

    Two undergrad degrees and an MBA? Is the doctorate next? 🙂 BTW – I have an MBA also and I think it helps out tremendously.

    Reply
  28. Bethany says

    March 9, 2012 at 6:37 pm

    Well, I have yet to get a full time job yet (a college degree is looming), but I am starting with my hourly paycheck. 10% savings off the gross, no buts. Tough sledding considering I live off of that paycheck, but once I have a real job… it'll be that much easier to save like I'm supposed to?

    Reply
  29. jefferson says

    March 9, 2012 at 7:44 pm

    i wish i had been smarter with my money when i was in my 20's..back when i first graduated college and was making money, i had no responsibilities at all.. but i really didn't save anything. pretty sad, really.the later you start, the harder it is

    Reply
  30. Michelle P says

    March 9, 2012 at 8:07 pm

    Thanks everyone for the kind words! A blog is the best for self esteem haha 🙂

    Reply
  31. Caitlin C. says

    March 10, 2012 at 5:14 am

    This is so inspiring! I'm 21 and still have my whole twenties ahead of me… I want to save money and be able to do the things I want when I'm older!

    Reply
  32. Kate says

    March 11, 2012 at 8:02 pm

    I am trying to save more money, a little bit each month. I also want to try make some money off my blog just to help with my shopping (ha!).

    Reply
  33. DNN says

    February 23, 2019 at 7:10 pm

    You have lots of staying power in this affiliate marketing and blogging game Michelle. I admire you for starting from the bottom and achieving side hustle millionaire status while swimming in personal debt back in the day. 🙂

    Reply

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My name is Michelle and I'm the author/owner of Making Sense of Cents. Learning how to save money and make more money changed my life. It allowed me to pay off $40,000 in student loans, start my own business, and I now travel full-time.

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