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Reddit, What is the best piece of financial advice you can offer to someone in their early 20's? (self.AskReddit)
submitted 3 months ago* by longfellow110
EDIT: Wow thanks for all the advice guys. Good turnout!
[–]Rick_Dagless 315 points316 points317 points 3 months ago
If I could go back a few years, I'd give myself philosophical advice rather than practical advice: Don't get caught up in what you have. So many of my friends in their 20's can't do anything because they're broke. Many of them are broke because they had to have a newer car, expensive clothes and the latest cell phone.
In your 20's, save your money so that you never have to turn down a great experience. Life is more important than the shit you collect.
After adapting this mindset I've found it easier to save money.
[–][deleted] 82 points83 points84 points 3 months ago
Very true. You will feel poor if you're in that situation. You see a tasty sandwich, and you can't buy it.
Meanwhile, if you have a cheap car (or none) and can spend money on little things whenever you want, you'll feel rich.
And I speak as someone who was very poor as a kid and fairly wealthy now, so I know both feelings.
[–]bobadobalina 58 points59 points60 points 3 months ago
so now you can afford to take the gun and the canollis
[–][deleted] 19 points20 points21 points 3 months ago
Hahaha someone finally gets the username.
[–][deleted] 1 point2 points3 points 3 months ago*
This is so true. If you live well within your means, you can feel "wealthier" than someone making many times what you make. Because it's not about the actual stuff you have. A cool car doesn't make you happy, a big ass house doesn't make you happy.
But having money be something you don't really have to worry about constantly? That's the real luxury irrespective of how much you actually make.
That's why it always blows my mind when you've got these really rich people overextending themselves: You have a clear path to financial peace of mind and you blow it on Escalades and Jet Skis. Morons.
[–]JoshSN 32 points33 points34 points 3 months ago
This must be a cultural thing.
I never knew anyone with a new car, that I can remember.
Expensive clothes? Hah.
I guess if you hang out with hippies, you wake up with a good recipe for cheap granola.
[–]mildlyimpressed 8 points9 points10 points 3 months ago
And lice....
But the granola makes it worthwhile.
[–]Pseudo_Moron 10 points11 points12 points 3 months ago
How true. Occasionally you will come across a great opportunity that will cost something. If you cannot afford it (for lack of savings) you will have no option than to pass it up.
[–]jillyboooty 13 points14 points15 points 3 months ago
As a 17 yo that loves old cars, shops at goodwill, and doesn't understand the benefits of a smartphone, I'm glad I read this comment. It made me feel like I'll be rich.
[–]AllenTalent 56 points57 points58 points 3 months ago
I dont understand how you dont understand the benefits of a smartphone? It keeps you connected to everything no matter where you are. Its having a laptop, a camera, and a cellphone in one small device. Even if you dont want one, or dont need one, surely you understand the benefits of one.
[–]NoApollonia 19 points20 points21 points 3 months ago*
I still don't get it - why do you need all of those features? I get the cellphone and camera - but do you really need an extra computer? Is there anything you really cannot wait to know until you can either get to a public computer or home? I rarely find myself in a position where I'd like to know something that I could find out online - but never in the position where I can't wait like I've always done.
This scares me for the generation who has no idea what growing up without the internet was like. If we needed information, we had to read a book. If we needed to know a phone number, we used the yellow pages or white pages that are still handed out around where I live twice a year OR call information.
[–]unsensible 23 points24 points25 points 3 months ago
The other day I was working in a cross connect for some data cabling, and a customer called saying their Metro Ethernet was down. So I used my phone to ssh into the router and save the config to my phone, reboot the router, and verify all was working well. Pretty damn important and convenient if you ask me.
[–]filiped 47 points48 points49 points 3 months ago
I'm a software engineer, the other day I was working, and I got a call, I answered the phone, talked, then I hung up and I played angry birds in the elevator.
Wait.
[–]sas4740 14 points15 points16 points 3 months ago
You are the 1%.
Seriously though, I think if you can't recognize that there are benefits to a smartphone, you are pretty stupid. However, I don't feel the benefits warrant the $25/month data plan.
For some people, the value isn't there. I myself am often near WiFi, so my older iPod Touch works just fine, and over 26 months of owning it, that's a lot of money not paid to a data plan.
[–]TheDerwin 18 points19 points20 points 3 months ago
He/she is a 17 year old. Stop pressuring our youth of today to get something that will cost them $50+ a month. Just because YOU can't live without it doesn't mean others can't.
[–]what_an_ass 18 points19 points20 points 3 months ago
(s)he is not pressuring, he is just showing what kind of benefits smartphones have.
[–]Chips544 3 points4 points5 points 3 months ago
geez.....what an ass
[–]MostAwesomeUsername 123 points124 points125 points 3 months ago
Only one piece of advice?
Income must be higher than expenses at all times.
[–]kryx 48 points49 points50 points 3 months ago
If you make $100 a day, and spend $99.99 each day, you will be happy for the rest of your life.
If you make $100 a day and spend $100.01 each day, you will be in debt for the rest of your life.
[–]MostAwesomeUsername 27 points28 points29 points 3 months ago
My goal is to make $100 a day and spend $40 each day. :)
[–]exelmans 43 points44 points45 points 3 months ago
My goal is to make a billion dollars a day and spend nine hundred ninety-nine million nine hundred ninety-nine thousand nine hundred ninety-nine dollars each day.
[–]angreesloth 70 points71 points72 points 3 months ago
All right, mitt.
[–]bobadobalina 16 points17 points18 points 3 months ago
so, if you live an average lifespan, you would leave behind the crushing debt of $273
[–]tnjhawks 10 points11 points12 points 3 months ago
Plus interest. So more like $10,000.
[–]igotfiveonit 356 points357 points358 points 3 months ago
Don't fuck up your credit.
Save money.
[–]deesel18 83 points84 points85 points 3 months ago
Smart tip: If you are paying off any debt, make payments twice a month perhaps an auto draft on your paycheck schedule. You would be amazed at the interest savings of paying $100/biweekly vs $200 monthly. You will pay off your debt much quicker as well.
[–][deleted] 67 points68 points69 points 3 months ago*
There is a 2nd plus to this: there are 26 biweekly periods during a year meaning by paying biweekly you are actually paying the equivalent of one extra month a year towards your debt.
[–]pwny_ 33 points34 points35 points 3 months ago
My head just exploded
[–]bobadobalina 11 points12 points13 points 3 months ago
this does not work with the Mafia
[–]amford 7 points8 points9 points 3 months ago
This turns a 30 year mortgage into a 25 year one. My bank does this automatically. BTW i am 22 and own a house. Buy one. Its better than paying rent.
[–]Muddybulldog 30 points31 points32 points 3 months ago
The biggest benefit in buying a house is not having to listen to people explain to you all the benefits of buying a house (again and again and again).
[–]gamist 13 points14 points15 points 3 months ago
That is heavily dependent on your situation, I thought my job was safe but then bam. unemployed and needing to move to Texas for a job. So glad I didn't end up buying that home.
[–]SaddestClown 8 points9 points10 points 3 months ago
22 and you already own your house? Way to go man.
[–]Tartlet 2 points3 points4 points 3 months ago
Hm. Not sure how I feel about this advice for younguns. Buying a place this young forces you to have a tie to that place for years to come. Only buy a house if you know you are okay either living In said city for a long while or know the market is strong enough in the region to resale quickly if the need arises.
[–]Virikk 43 points44 points45 points 3 months ago
To add to that, don't get in over your head in debt. When you get a job, your first goal should be to eliminate any excess debt and the only debt that is good/ok to have is 1 mortgage, 1 car loan, and student loans (IMO).
I've been debt free (except for my mortgage) for 3 years or so, and it is a wonderful feeling not worrying about loans, credit cards, car payments. Just my 2c.
[–]CarolineTurpentine 12 points13 points14 points 3 months ago
I don't think anyone under the age of 25 should be buying a car that they need to get a loan for unless they need it for work. Save up and buy a $3000-$4000 car that will last you a couple of years and run that fucker into the ground. By the time that car dies (hopefully you get 6-8 years out of it) you should have a lot of your other debts under control and be in a position to buy something nice. Don't buy something nice when you're young and less likely to take proper care of it.
[–]tells_shitty_stories 634 points635 points636 points 3 months ago*
my dad had about 3 credit cards for like 2 years and my mom would always tell him "don't get any more cards lem." my dad's name is lem. so he would cut up his mcdonalds gift card or his home depot gift card and say "look, look, look... look" in front of my mom then he would throw them away in the garbage can out at the street.
edit; almost forgot, lem is my dad's name btw.
edit edit; i already said that up in my story, don't read the first edit.
[–]buttburgerlar 200 points201 points202 points 3 months ago
A+ would read again
[–]Stones_ 67 points68 points69 points 3 months ago
After reading this I was like wtf this is stupid. Then I read your post, checked username, and now I cant stop laughing.
[–]flagamuffin 36 points37 points38 points 3 months ago
In this you are very similar to everyone who has ever come across this novelty account for the first time.
[–]paveln 2 points3 points4 points 3 months ago
Damn, I thought you were tells_shitty_stories again.
[–]loolwat 11 points12 points13 points 3 months ago
http://cache.gawker.com/assets/images/jezebel/2010/10/thumbsupobama.gif
[–]the_opinion 8 points9 points10 points 3 months ago
Who's lem? Is that your dad name?
[–]Its_OppositeDay 6 points7 points8 points 3 months ago
Got me again...tried to make sense of the story and figure out a way in which it was relevant...the ability to craft stories that sound like they're going somewhere and pertain to something...genius.
also love the edits.
[–]fyiila 44 points45 points46 points 3 months ago
Oh man, thanks for the laugh. I went from bored to laughing so fast when I read your username.
[–]Brianderson51 4 points5 points6 points 3 months ago
I'm seeing this guy everywhere lately. And I love it!
[–]zops 15 points16 points17 points 3 months ago
Was halfway through my reply when i read your username.. ಠ_ಠ
[–]Wrongcaptcha 9 points10 points11 points 3 months ago
I was laughing at how bad this story was. Then, I saw the novelty in the name. I am amused.
[–]JPmoneyman 2 points3 points4 points 3 months ago
This is the 2nd time in 2 days that I read one of your posts. Good show sir! Keep it up.
[–]Ed_Finnerty 2 points3 points4 points 3 months ago
got me twice in two days. Well played.
[–]123fakerusty 1 point2 points3 points 3 months ago
looked at your profile history...good stuff
[–]amford 1 point2 points3 points 3 months ago
he strikes again
[–]polarbearplunge 1 point2 points3 points 3 months ago
Despite reading all of your posts yesterday (and I mean all of them), this STILL got me!
[–][deleted] 3 months ago
[deleted]
[–]pbear737 1 point2 points3 points 3 months ago
You got me today! I wasn't fooled yesterday with some story about driving your sister somewhere. But alas! I could not avoid the shitty stories forever.
[–]LyricalHolster 24 points25 points26 points 3 months ago*
Adding to that, get a credit card to build your credit.
DONT overspend with money you dont have, i.e credit card limit.
edit: Also, there is no sex in the champagne room.
[–]arana_discoteca 12 points13 points14 points 3 months ago
To add to that a bit, a credit card can help to establish some credit, but use it sparingly and only for things you could have paid cash for. Think of the card not as free money, but just as way to build credit. Keep it paid up.
[–]dust_devil_ 15 points16 points17 points 3 months ago
not true.
[–]giraffebaconequation 184 points185 points186 points 3 months ago
A simple thing I have learned is, learn to cook for yourself. Eating out at restaurants can get expensive. Also home-cooked food can be much healthier.
[–]Distance_Runner 9 points10 points11 points 3 months ago
I'm 20 and lucky enough to have financial support through college from my parents, but I gotta say learning to cook for yourself is great for reasons beyond just saving money.
I love to cook my food (and dinners for my family)... I get a feeling of accomplishment when I finish a dish and then complimented on it....
But as for the saving money, this is also true. I made Jambalaya last saturday night (cost $25 for the ingredients, and I used expensive stuff) and it fed me for 3 dinners and 4 lunches.
[–]mirthquake 36 points37 points38 points 3 months ago
THIS. I've seen countless friends burn their paychecks away on eating out, even if only a slice of pizza or deli sandwich. Learn to make the foods you like exactly the way you like them. Not only will you save hundreds of dollars a month (for real) but you'll impress friends/ladies/gentleman/whomever.
[–]churika 28 points29 points30 points 3 months ago
I totally agree but I think there comes a point where being frugal is great, but only if you don't miss what you give up. Eating at restaurants for the experience is something I love and makes my quality of life better. As long as you have a plan to save your money I think the rest should be spent as guilt free as possible on what you enjoy, not what's best for you financially.
[–]aws5000 18 points19 points20 points 3 months ago
Only if its with a date. Then I seem very excited to be out with her but really.... its the free breadsticks.
[–]mirthquake 9 points10 points11 points 3 months ago
You're totally right. If visiting wonderful restaurants makes you happy, then definitely go for it. But when I reflect on my 20-year-old self, I wish he'd opted to make his own sandwiches more frequently than he did.
[–]somechineseguy 5 points6 points7 points 3 months ago
You forgot hobbits
[–]spiffulous 7 points8 points9 points 3 months ago
Yes, and: really limit how much you spend drinking in bars.
[–]Farabee 6 points7 points8 points 3 months ago
Problem is, home-cooked meal usually takes 30-60 minutes of prep time, then 10-15 minutes of cleanup. Some days, you just don't want to have to deal with that.
You can buy frozen crap from the store, but that really isn't an improvement over most fast food options.
[–]PigDog4 75 points76 points77 points 3 months ago
Learn to stirfry. Cut up stuff while your pan is heating. Invest in a rice cooker (they're not expensive and rice is delicious, I gotta replace my broken one whenever I go to the store next). When I'm lazy, my day goes like this:
Get back from work, throw rice and water in cooker. Go play videogames until I'm hungry (it's not like the cooker will ruin your rice).
Put pan on stove, chop up chickenbreast and an onion, any fresh vegetables you want (or use frozen for extra laziness), by now pan is hot, throw in chicken and garlic and salt and pepper. When chicken is 2/3-3/4 done (<10 mins, seriously) throw in vegetables, ginger, some soy sauce (not very much yet). Wash cutting board when that shit cooks, stir it every now and then. Put cutting board away, stir until chicken is done and vegetables are hot. Stir in soy sauce/whatever the fuck else you want (sriracha!!) to taste. Serve over the rice.
This is what you just made: 1 huge dinner (seriously, rice is super filling and cheap as hell), 1 large lunch (or two lunches if you bring a piece of fruit). So probably close to 4 regular sized meals (I eat a lot...)
This is what you used: Cutting board, knife, rice cooker, pan. Or a pot if you don't have a rice cooker, PLUS you did your cleaning while the shit was cooking. Not counting the rice, this takes 30 minutes + 5 to wipe out the pan/pot/rice cooker, PLUS you got to play videogames while "cooking."
Also, you can use whatever vegetables you want. Super lazy? Frozen bag from the store. Less lazy? Canned are okay. Don't like asian? Substitute stuff around, I like kielbasa, peppers (red and green), and potatoes (gotta go in first cuz they take eight-billion years to cook). Like ground beef? Why the fuck not, use that instead! Don't eat meat? Find something else cool to throw in. I made one for my girlfriend the other day that was just potatoes, sausage, onion, and green beans over brown rice. Took 30 mins (not counting the stupidass rice because I forgot to turn the stove on -_-) and I could make mine spicy and hers more soy-saucey.
Additionally, almost impossible to fuck up. If your meat is cooked through and your vegetables are hot, it's edible. If there's no meat, you really can't fuck it up. If it's not burning, it's fine.
Also fuck you now I'm hungry and stuck in lab >:(
[–]Farabee 14 points15 points16 points 3 months ago
Love how Reddit gives me super-detailed instructions on how to make easy fresh meals when I make a small comment in a thread. :P Thanks and karma to you.
[–]Seicair 11 points12 points13 points 3 months ago*
Make more and eat leftovers. Big pot of pasta. Soup. Stew. Beef roast with potatoes and onions. Crockpot of pork. Baked rosemary chicken with carrots potatoes and onions.
More work, but it'll feed you for a while. If you get bored with a dish, stick some in the freezer and pull it out to eat another time.
Edit- I'll often do this sunday afternoon and I've got lunch and dinner for half the week.
[–]bananas_are_cool 11 points12 points13 points 3 months ago
This. One simple meal I learned was to boil a large Ham Shoulder in water with onions, carrots, and potatoes. Leave it simmering for a few hours, throwing in the veggies at the last 1/2 hour. Prep time in 20 min tops, cost is about $15, and you'll have leftovers for a week.
But is doesn't end there. Save the stock (the water you boiled it in + extra veggies) and a bit of the ham in the fridge. Then break out your crockpot, soak some split peas overnight, then the next day add your stock and let it simmer during the day. You now have Split Pea Soup for another week. Saves you a hell of a lot of money.
Hot Ham Water FTW.
[–]steegyn 2 points3 points4 points 3 months ago
Baby, you got a stew going
[–]bigsaucybob 1 point2 points3 points 3 months ago
In the last year or so, I have become a very skilled individual in the kitchen. I have no doubt that money has been saved by eating home, not to mention the fact that showing someone you can cook a good homecooked meal is rather impressive.
[–]ThereisnoTruth 239 points240 points241 points 3 months ago
Spend less than you earn. If you can't pay cash - you can't afford it. If you really need to buy that thing right now - wait a week - it will still be there, only by then you won't need it anymore.
[–]Zergo1 64 points65 points66 points 3 months ago
This is absolutely fantastic advice! I created about $6,000 in debt when I was between the ages of 20-23 because I accepted debt as normal. Huge mistake, live cash only as much as is possible!
If you already have debt, look up the debt snowball to eliminate debt - works wonders.
[–]curien 55 points56 points57 points 3 months ago
ThereisnoTruth's advice ("If you can't pay cash - you can't afford it.") doesn't mean you have to actually use cash. I almost never use cash for anything, but I pay my credit card bill in full every month. I could pay cash, but I choose to use a more convenient transaction method (plus rewards points).
[–]Zergo1 4 points5 points6 points 3 months ago
I was just referring to bad debt that I had accumulated. I should have clarified. I do use credit cards for exactly those benefits and carry a zero balance 95% of the time.
[–]ZeroMomentum 11 points12 points13 points 3 months ago*
Not being a troll, but isn't that common sense? context: I am Asian, we were raised with simple personal financial principals.
Edit: added link, it is cool, Jackie and I came from the same place
[–]JackalsNose 13 points14 points15 points 3 months ago
I can't stand how many of my friends are excited about only having around $20k in debt from school. These are the same idiots who have motorcycles and nice cars that they make payments on.
Graduating (almost 22) with no debt is a fantastic feeling and leads to an immediately brighter financial future.
[–]duffxyeah 23 points24 points25 points 3 months ago
So you are basically saying that if someone can't figure out how to graduate from a 4 year university w/o building debt in student loans he/she is an idiot?
I'd love for you to explain this.......
I went to a public, in-state university, worked part time at a restaurant/as a tutor, received decent financial aide due to the fact that my parents don't make a lot of money (combination of grants, scholarships, and loans) and graduated w/ around $20,000 in student loans to pay off.
I would agree with you on one point though....being fortunate enough to graduate college debt free probably puts you in a better position to succeed financially...not because ppl w debt are 'idiots' and you are somehow better than them, but because growing up w/ money just gives you that type of advantage..
[–]tdov 2 points3 points4 points 3 months ago
This. I go to a public in-state university.
I know people who live relatively simply, don't get financial support from their parents, don't drive fancy cars (or don't drive at all), and still graduated/are graduating with loans.
[–]estrtshffl 45 points46 points47 points 3 months ago
The fact that my parents are paying for all of my school is so fucking amazing.
[–][deleted] 11 points12 points13 points 3 months ago
My grandparents paid for mine. I thank my lucky stars. If i had to do loans/pay for it myself, i just wouldnt have gone to college.
[–]LoompaOompa 13 points14 points15 points 3 months ago
Same here. We are so lucky. It didn't really hit me how helpful it was until I graduated in December and started working. I look at all of the money I'm putting into savings each month, and thinking about how all of that would be going towards debts, and it's an incredible feeling. It's also really sad that this isn't the norm for everyone.
[–]Stumblin_McBumblin 4 points5 points6 points 3 months ago
It is sad... and I loathe you.
[–]Rizlo 10 points11 points12 points 3 months ago
This is not new advice either... "Don't spend your money before you earn it." -Thomas Jefferson
[–]mlw72z 23 points24 points25 points 3 months ago
I agree except for buying a house. You'd have to save forever to buy a house but in the mean time you'd be paying rent that could otherwise be going towards a mortgage.
[–]algo_trader 32 points33 points34 points 3 months ago
People saying that buying a house is always the answer are a big cause of the financial crisis we are in now. When you buy a house, there is a whole lot of money that you "throw down the drain" every month as well- The interest component of your mortgage payment, the taxes you pay on your property, insurance on your property, and maintenance/HOA fees that you may be subject to. If you aren't paying maintenance fees, you should also add in general maintenance for things like lawn upkeep, repairs, etc. If you don't have 20% to put down as a down payment, you will also have to pay for mortgage insurance.
Lets compare two scenarios: In scenario 1, you rent an 1100 sq ft 2BR apartment in a high rise building for $2750. This money is entirely "wasted" in that you are spending money, and getting no equity in return. On the other hand, we are free to save the rest of our money, and even invest it.
In scenario 2, we buy a condo a few blocks away that is roughly equivalent to the rental apartment. The price is $600,000, and the taxes, maintenance, and insurance add up to $1700/month. You were lucky and got a 3.25% rate on your mortgage, and put 20% down. So you have a 480k mortgage. Your mortgage payment is $3300/month. Your total payment is $5000/month. The taxes, interest, and insurance portion of your monthly payment is roughly $3000. This is "thrown away" money. $250 more than the rental apartment. The renters are free to invest their money in whatever they choose, while the owners now have reduced their free cash flow each month and have to hope the house doesn't lose value. Taxes can still shoot up. Though in this scenario, where you will eventually win is that rent tends to go up, but the principal component increases over time, while the interest component decreases.
BTW- these numbers aren't made up, I bought a place based on these numbers a few months ago outside Manhattan. Things start looking a lot less favorable when you have interest rates that are closer to historical averages. Did you know that on a more typical $250k 30 year mortgage at 5%, you end up paying $233k in interest, making the total cost of that house $483k?
[–]Maehan 9 points10 points11 points 3 months ago
There are also tax effects for owning (which I disagree with in principle) to take into account. A lot of your expenses from the above are deductible, some are even tax credits (certain maintenance upgrades).
And your principle payments increase over time due to the nature of amortization. Which isn't to say that buying a house is always or even usually a good financial decision.
[–]algo_trader 19 points20 points21 points 3 months ago
Yes, there are.
I forgot to mention this before. The nytimes about 5 years ago created the best calculator I have ever seen by far that takes every factor I can think of into account and lets you plug it in to see if it is better to rent or buy.
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
When playing with this, its important to be very realistic with your assumptions. I found that for most cases, the break even point when buying was better than renting was 5-10 years out. Many of my friends bought "starter homes" (which were also fixer uppers that needed a lot of work) that they only planned on living in for about 5-10 years before moving on to something bigger. They would likely have been better off if they just rented for that period.
Of course, there is always something to be said about the pride of ownership too, but this thread was focused on the financial aspects.
[–]flumpis 4 points5 points6 points 3 months ago
pride of ownership
Am I the only person that doesn't care about this? Renting is great - to quote Mitch Hedberg, I don't gotta fix shit!
[–]Akselmusic 17 points18 points19 points 3 months ago
This is a fair argument to an extent. As someone else pointed out, at 20 most people are not buying a house. The biggest thing that has kept me from looking into a house is that fact that I become responsible for any repairs and upkeep. In an apartment anything over a certain amount I am not responsible for (obviously these conditions vary from place to place). My fridge goes out? New one brought in. My furnace dies? Maintenance fixes it. Just this fact alone in the last year has probably saved me a few grand. Most people at 20 are not making that kind of money to have enough comfortably for upkeep so it is not exactly a 1 to 1 trade between rent and mortgage.
[–]DeepRoast 7 points8 points9 points 3 months ago
Agree, houses are not an investment no matter what people say.
[–]Irishpilot84 2 points3 points4 points 3 months ago
tell that to the guy living for free in a duplex while his tenants pay his mortgage payment + $100. If you are stupid and buy the wrong house it wont end well for you but you can make a house an investment if you are smart.
[–]rampart103 7 points8 points9 points 3 months ago
You have to weigh what you're losing in interest vs what you're paying in rent. Assuming you're paying 500 in rent vs 1000 for a house payment... you'd come out way ahead to keep paying that 500 in rent and socking the other 500 away for a down payment. I'm not sure what the turning point there is, but it's way beyond the minimum principle that most banks require you to have to buy the home.
[–]MegaMoule 4 points5 points6 points 3 months ago
If you can't give a good cashdown and good monthly payments on the house, your money will go out paying interests. In the short run you are better paying an apartment's rent for a few years, rather than pay huge interest rates for quite some years
[–]OHeyReddit 7 points8 points9 points 3 months ago
To be fair, most people in their early 20s aren't buying houses.
[–]legojerry 18 points19 points20 points 3 months ago*
I'm 25, I own my home. No mortgage. Honestly, the house was pretty inexpensive- but it took a lot of work to get it where it is now.
It's nice not paying a monthly fee to sleep. It's almost like I make 700 extra dollars a month.
edit: proof, http://i.picasion.com/pic49/dd9d59c5ffadc9a25e0bad46b8fb8c5f.gif
[–]arana_discoteca 3 points4 points5 points 3 months ago
How'd you do it?
[–]Crankyshaft 2 points3 points4 points 3 months ago
Yes, but you apparently live in either rural Illinois, Kansas or North Dakota, where housing prices are substantially lower than the vast majority of the United States. MLS listings for Galesburg, IL for example have several houses listed at under $20,000 and a couple for less than $15,000. Very nice if you happen to live in such circumstances, but not universally applicable advice.
[–]PurpleCapybara 5 points6 points7 points 3 months ago
Ignore his username. That is truth.
[–]Ramblin_Dash 5 points6 points7 points 3 months ago
Ctrl-F "Spend less than you earn"
(Almost) All other financial advice boils down to this.
Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery
[–]knowledgehungry 4 points5 points6 points 3 months ago
except car tires
[–]DrStabbingworth 7 points8 points9 points 3 months ago
Any basic/required maintenance really. Make sure you include maintenance costs in any calculations when buying stuff.
[–]Seicair 7 points8 points9 points 3 months ago
Spend less than you earn.
It's amazing how many people seem to not know this.
It always shocks me when people making what I make say "oh good, payday's tomorrow, I'm sick of ramen". Or talking about getting something done on my car "Ouch. Well, at least payday's friday, right?"
I was so confused the first time that happened. (wtf does payday have to do with getting my car repaired?)
I don't make that much, I should be making 50-60% more, but I still have 6 month's salary in my savings account. I never eat ramen because I can't afford food, or wait til payday to get my car fixed. Live within your means!
[–]churika 7 points8 points9 points 3 months ago
I read this guys book and it really helped me a lot to make a plan to do the things mentioned in this thread.
http://www.iwillteachyoutoberich.com/
The book is directly aimed at the 20 something's with disposable income. The guy has some great advice to start planning and budgeting your money.
Also mint.com.
[–]squeaked 2 points3 points4 points 3 months ago
I am always so surprised that this isn't obvious to everyone. I have a friend who has maxed out her credit card several times at the age of 20. She works part time and goes to school and has a credit card. She uses it mostly for clothes and other objects. I hav another friend who has two credit cards, one is a military star card and the other is for "incidentals."
I do feel like student loans are a different story, to some extent. They seem like a fact of life now. But I also have friends who get financial aid and loans and are still broke because they wasted their money.
[–]wateristasty 1 point2 points3 points 3 months ago
Fantastic advice, I started practicing this about a year ago and it's completely true. Impulse buying is dangerous.
[–]UncleFungus 144 points145 points146 points 3 months ago
Go to college. Marry only for love. And wrap your torpedo.
[–]Server969 58 points59 points60 points 3 months ago
i believe the thread is for financial advice. not about wearing cond--
oh. OH.
[–]Red_AtNight 22 points23 points24 points 3 months ago
The American economy seems like a casino, but there are a few simple rules. Stay in high school, and don't have children before the age of 20. People who follow those two rules are much less likely to become poor, than people who don't.
[–]enginerd11 73 points74 points75 points 3 months ago
If you have a job that offers it, start a 401k.
[–]Nougat 38 points39 points40 points 3 months ago
And maximize your contribution to it. If your company matches some percent up to some amount of contribution, you make at least the "up to" amount of contribution. That's the biggest return on your investment you will ever get.
[–]1stand1st 17 points18 points19 points 3 months ago
Good call, let's note it should go: 401k up to the max company match, then Roth IRA, then the rest of your 401k, then taxable accounts (if there are no other tax free instruments available).
[–]curien 3 points4 points5 points 3 months ago
401k up to the max company match, then Roth IRA, then the rest of your 401k
My rule of thumb is that any savings dollars that would be taxed at 25% or higher should be tax-deferred. If your marginal rate is 10% or 15%, by all means, max out your Roth contribution. But it's probably not such a great idea if you're in the 25% bracket.
Also, some companies (like mine) offer a Roth 401k.
[–]paranode 2 points3 points4 points 3 months ago*
Hard to say because nobody knows what the government will do with tax rates by the time you retire. Roth limits are relatively low though so it is easy to max it out every year and still go back and contribute to a 401k.
Also, your opportunity to contribute to a Roth may disappear if you start making enough money.
[–]Cadmium72 7 points8 points9 points 3 months ago
Right fucking now! Not in a couple weeks, weeks turn into months then into years of not earning awesome compound interest.
[–]skyedemon 2 points3 points4 points 3 months ago
For non Americans: what IS this 401k I keep hearing about?
[–]adamsimon 161 points162 points163 points 3 months ago
I really thought that said "someone in the early 20's". I was about to say
"Get out of the stock market and invest in metals needed for world wars."
[–]ass_munch_reborn 16 points17 points18 points 3 months ago
I would have responded with:
Yeah right. The stock market is booming right now, and what's the chance of another World War happening? C'mon man, those Germans, they can't even build a trench. You mean to tell me they going to start another war? Sure, whatever, dumbass.
Now you can play fear monger all you want, but I got some flapper girls to hang out with at the Speakeasy.
[–]twenty_one 58 points59 points60 points 3 months ago
The sad thing is that this is probably relevant now.
[–]minikites 52 points53 points54 points 3 months ago
Everything you need to know about financial planning, courtesy of Scott Adams (Dilbert)
If any of this confuses you, or you have something special going on (retirement, college planning, tax issues) hire a fee-based financial planner, not one who charges a percentage of your portfolio.
[–]mossyskeleton 3 points4 points5 points 3 months ago
Okay this is probably an incredibly stupid question, but what would I have to google to find a fee-based financial planner in my area? What are they called? What terms do I look for that tells whether or not they're fee-based?
I am not good at managing my own money, but I do have a very well paying job right now and am in need of someone knowledgable to help me handle it. What should I look for?
[–]baseballrodent 16 points17 points18 points 3 months ago*
I will help manage your money
Edit: I am Jewish, so...you know...qualifications...
[–]KronktheKronk 40 points41 points42 points 3 months ago
Money is overrated. Put some away to plan for your retirement, but don't be those people who don't live now because they're so worried about having a big balance in their bank. It's not really worth it to be a 50 year old millionaire who never did anything fun and crazy and maybe a little expensive.
[–]IshotAbeLincoln 65 points66 points67 points 3 months ago
Open your roth ira right now, contribute as much as you can as early as possible. Compounding interest is an amazing thing. I started mine in 2004 and have been contributing 300 a month since. You know what I don't even miss that money because I never had it and I have a home little chunk of money stashed away.
[–]TomFoolery87 20 points21 points22 points 3 months ago
This coupled with some sort of 401k type account means that by retirement age, you can realistically be in the "1%".
[–]TheShrinkingGiant 48 points49 points50 points 3 months ago
The top 1% currently makes ~$400,000 a year. A "good" investment in the stock market makes 8%. That means he has a principal of 5 million at retirement. (Warning: Excessive math incoming)
Now let's imagine he is 22, and making 50000 a year, and putting 10% (impressive!) to a 401k as well. With this assumption, I am not going to limit hit 401k contribution (which is currently 17,500). I also have him getting a 5% raise annually, and the stock market ALWAYS gives an 8% increase on his money.
He would hit 5 million dollars at 67 years of age. That's not terrible. The problem is we ignored inflation. Let's call average inflation 3% (again being generous)
That means the top 1% now makes $1.5 million annually, and our poor investor is only making a fourth of that.
I know I make a whole lot of assumptions in this, but 401k and IRA investing will never get you to the top 1% income.
(Of course, this isn't to discourage. I currently contribute 13% to my 401k/Roth401k, and I have a pension, AND I have a Roth IRA. And an investment property. And a wife with a 401k (9%).)
[–]dentttt 14 points15 points16 points 3 months ago
Some very good advice in here, but 8% annually seems a little high for an assumed ROR.
[–]TheShrinkingGiant 25 points26 points27 points 3 months ago
Oh absolutely it's high. I was using solid high end numbers just to show that you don't get to be the 1% via investing in a 401k.
[–]Causemos 18 points19 points20 points 3 months ago
Save up for things BEFORE you buy them. Borrowing money for something fun is just stealing fun from your future self. Not only will you pay more for it, but you'll have to wait longer for the next thing. Your future self will thank you.
[–]Liar_tuck 35 points36 points37 points 3 months ago
Dont spend like its all about getting laid tonight. Won't do a shit of good when you are eating cat food in 40 years.
[–]Learfz 72 points73 points74 points 3 months ago
Dude, cat food is expensive.
[–]Liar_tuck 6 points7 points8 points 3 months ago
Perhaps I should have specified "Generic store brand Cat food".
[–]PhoenixKnight 36 points37 points38 points 3 months ago
Or Bachelor Chow.
[–]Brix106 82 points83 points84 points 3 months ago
Don't Have a kid....
[–]newtothelyte 31 points32 points33 points 3 months ago
As sarcastic as this may be, this is probably the easiest way to avoid a financial shithole. Kids are the biggest money pits ever, especially in your 20s where you may not have the best job/apt. Every time I hear that my friends have kids I just shake my head
[–]piperman60 22 points23 points24 points 3 months ago
This isn't sarcastic. It said "piece of advice for early 20s" No sarcasm at all. Don't have a kid...
[–]SpecialOpsCynic 69 points70 points71 points 3 months ago
Buy used cars
[–]JohnnyWasHere 35 points36 points37 points 3 months ago
Although I agree with not overspending on cars, the used car market is a bit overpriced right now. In the long run, someone in their 20's might do better with a new or very slightly used car depending on their budget.
[–]treasurepirateisland 12 points13 points14 points 3 months ago*
Or the bus/bicycle if you are a *poor student.
[–]bobadobalina 1 point2 points3 points 3 months ago
Or the bus/bicycle if you are a spoor student.
great advice
i would imagine anyone who studies the droppings of wild animals does not make much money.
[–]guywhoishere 8 points9 points10 points 3 months ago
Except for men in there early 20s, insurance makes new cars unaffordable.
[–]financiallyanal 12 points13 points14 points 3 months ago
Exactly. I think it might depend on the person - I was brought up to basically keep cars until they die. Even after 15-20 years, if it needs $1k of repairs, it's often justified because if it can last another year, it's worth it.
[–]bobadobalina 6 points7 points8 points 3 months ago
fun fact: the average age of cars on the road is 11 years
[–]Badger2qrd 3 points4 points5 points 3 months ago
funner fact: the average person has no idea how to maintain and properly operate their cars
[–]megablast 9 points10 points11 points 3 months ago
Buy used everything. I have never bought anything big new, until recently. Bicycles, some clothes, TV.
And if you can, avoid buying a car at all. If you are in a position where you do not need one for work or school, do not get one just for those few occasions a month when you do.
Buy used everything
underwear? condoms? toilet paper?
[–]megablast 2 points3 points4 points 3 months ago
Yes, as well as food, haircuts, airline tickets, chicken, college degrees, blank dvd's and more.
[–]loopy212 19 points20 points21 points 3 months ago
I've found these to be applicable at all stages of life:
Specifically to young people:
[–]algo_trader 5 points6 points7 points 3 months ago
I agree with all of this, but I just wanted to expand on "live below your means"
Can you afford your own place? Don't bother and get a roommate. Rent will be cheaper, living expenses will be cheaper, and living with other people can lead to good times.
Your coworker's brand new altima looks pretty sweet eh? Don't get caught up in it. If you have a car in good working condition, the best thing you can do is drive it until it starts falling apart. Then trade up to a used model a few years old. Cars are good enough now that it doesn't matter. You can make your car just as shiny as a new one by giving it a wax.
My general rule of thumb is, if I am going to get pissed if I buy something and it breaks, I probably couldn't afford it. This also falls under Tyler Durden'esque advice of don't let your shit start owning you.
If you stick at this long enough, eventually you will get to a point where you start exceeding your financial goals. It was a good feeling realizing that I bought a new tv last week, and realized that it was paid for by dividends I collected over the last quarter.
Probably the only thing I would say contra to this is: Don't be afraid to spend a reasonable amount of money on clothes if you like the way you look in something. I used to be really cheap and shopped off the sale racks all the time, forgoing shirts I really liked because they were $50 instead of $20. I realized about a year and a half ago that I have a few go-tos and the rest is a bunch of mediocre stuff I don't really like. Once you are out of college, clothes last many years.
[–]digger_ex_pat 20 points21 points22 points 3 months ago
Avoid debt as much as possible.
Ex. you need a car, but you don't need a $20,000 car.
cardboard gets soggy in the rain. be sure to put your future home under a bridge or get a tarp
hit the dumpsters behind restaurants right after closing time. if you are lucky, some of the food will still be warm
be careful stealing clothes from goodwill boxes. if you fall in, you will be trapped.
[–]CaptainNoBoat 34 points35 points36 points 3 months ago
Save all your money to aid you in training for the single greatest heist this country has ever seen.
Then buy yachts and shit.
[–]longfellow110[S] 7 points8 points9 points 3 months ago
This needs more upboats (relevant joke)
[–]TheJoeD 17 points18 points19 points 3 months ago
I'll just say one word to you Benjamin, plastics.
[–]G1ng3rPaul 25 points26 points27 points 3 months ago
Start a pension NOW! Seriously, you'll appreciate it later
[–]agrosa 16 points17 points18 points 3 months ago
By Pension I think that you mean 'retirement account.' Most companies no longer offer pensions, but starting something like a Roth IRA or 401(k) at work, and doing a bit of research on systematic long-term investing will pay off tremendously in the long run.
[–]G1ng3rPaul 15 points16 points17 points 3 months ago
I'm in the UK mate, pension is same sort of thing
[–]wolfmann 7 points8 points9 points 3 months ago
TIL: Called retirement plans in the United States, they are commonly known as pension schemes in the United Kingdom and Ireland and superannuation plans or super[3] in Australia and New Zealand.
[–]el_diamond_g 2 points3 points4 points 3 months ago
Called RRSP in Canada
[–]sirooni 15 points16 points17 points 3 months ago
Open a Roth IRA and contribute 5 grand a year into it while you can. It will pay great dividends in the future.
[–]A_StarNamedAlice 16 points17 points18 points 3 months ago
Invest in your 401k if you have one. Invest the max to get a fully matched employer contribution.
Save your money! Put a certain amount from every paycheck right into savings.
Establish a credit history for yourself. Get a credit card, use it to pay for things, and pay off the full balance each month.
[–]Farabee 13 points14 points15 points 3 months ago
This really needs more upvotes. People need to realize that having no credit is just as bad and in some cases worse than bad credit.
[–]tar_heeldd 8 points9 points10 points 3 months ago
Never buy a brand new car.It depreciates immensely the moment you drive it off the lot.
Also, put 5 to 10% of each paycheck into a savings account. Do it EVERY time. You'd be surprised how easy it can be to build that shit up.
[–][deleted] 68 points69 points70 points 3 months ago*
Spend every penny you can afford on doing fun stuff.
[–]CletusDarby 7 points8 points9 points 3 months ago
Marry an accountant. It worked out well for me.
In all seriousness, it is all about moderation and being sensible. Still enjoy your 20's, but don't go out EVERY night. I used to blow through 30-40 bucks at a bar 3-4 times a week. That shit adds up quick. Same thing with eating out. Set goals, and stick to them. Reward yourself for achieving them (ie: if I cook 5 times this week, I can have GOOD pizza instead of Dominos this weekend).
Also- taking on a 2nd job (weekend or a few nights a week) as a bartender or a waiter is a good way to may some easy dough, and get some free food/drink. You will also meet lots of interesting people, and have a little spare cash for fun things (concerts, games, etc). Some mom and pop joints have a spare "call" list for people who are willing to pick up a shift here and there. Even after I got a day-job, I would fill in every once in a while if I wanted some extra cash to buy a new guitar or amp or pedal, etc.
If you live in a city, sell your car and use public transportation. I pay $86/mo TOTAL for my transportation. No car note, no insurance, no gas, no parking. If I really NEED a car, I use iGo- and I can rent by the hour (about $8/hr). Since I am saving hundreds of bucks a month, I don't feel bad about taking a cab every once in a while if the weather is crap. When the weather is nice, I bike.
Also- be sure you are taking full advantage of your benefits at work. For instance, we have gym in my building that we can use for free, so I don't pay some insane amount to watch other fat people sweat.
[–]Freak_Power 27 points28 points29 points 3 months ago
as an early 20 something i overspent, ruined my credit and lived paycheck to paycheck. at 28 i said fuck it and moved to a smaller (cheaper) place, went out almost never, still had fun, but didn't drop a bunch of money on eating/drinking out etc. i never carry a balance on my visa. use it, but only up to what i can pay in full every month. i now, at 33, own a nice house with 10 acres, savings and a smoking hot wife. also my sons walker and texas ranger.
tl:dr--suck it up and live like a poor person (cause you probably are) and always repeat the mantra "i don't need that." bring your own lunch.
[–]b0hica 5 points6 points7 points 3 months ago
If your company offers a 401k, max it out asap.
[–]cos 6 points7 points8 points 3 months ago
Really really depends on the circumstances! People in their early 20s can be in such widely different situations, where such very different advice applies!
I'll try to guess what's relevant to the typical early-20s redditor, though...
Learn your own habits and work with them, rather than making decisions based on what you think you should do even though you never do it. For example, a lot of people recommend budgeting, but that's exactly the kind of thing someone can keep trying to do for years and never stick to; they'd have been better off not even trying, and coming up with a strategy that actually matches how they think and act.
For example, I know that I'm more likely to spend money when I have more cash in my pocket, so if I want to limit my spending, I leave less than $40 in my pocket and avoid going to an ATM. For another example, something similar applies to how much I spend by card based on what's in my checking account, so I have two accounts at two different banks. If I want to postpone fun now to have more money for later, I transfer money from my main account to the other bank, because then my main checking account's balance is lower and I feel more constrained about spending. I know that if I really need the money for something important, I can transfer it back in under a week, but that's enough of a mental barrier to keep me from doing it if I don't need it. This kind of stuff works so much better for me than trying to keep to a budget, and it makes me feel much more free because what I'm constraining by my decisions is how much I spend, not exactly what I spend it on.
Discard the idea, prevalent in our culture, that you ought to buy a house for financial security. Renting is usually financially better than owning, as long as you don't use it as an excuse not to save any money (owning at least forces you to save, in the form of a down payment, even though it's a really shitty form of savings compared to other more convenient options). So forget that.
But do start saving. If you have a job that has a 401(k) or similar sort of plan, figure out the maximum you're allowed to contribute for the year, and set your contribution to that. Whether you have a job with a 401k or not, open your Roth IRA now and put something in it. Make sure to set up a way for you to easily transfer money into it from your regular bank account, from your computer.
[–]rv4flyer 6 points7 points8 points 3 months ago
60yo fairly new to Reddit here. (brought here by my son)
I have two pieces of advice on this subject. Get 10% of your pay skimmed into some sort of a savings account/investment account, before you get the cheque or before its deposited in your regular day to day account. The account should not be accessible with your debit card. (makes the money hard to get to) The other thing is have one credit card only and pay the balance off every month, no matter how hard it is.
Thats it.....if you do theses things you will be amazed at how quickly you are ahead of the game and not in debt.
[–]PerpetualReduction 20 points21 points22 points 3 months ago
I don't have any advice to give because I'm only a sixteen-year-old, but I'd like to thank everybody else for assuring me once again what I should be doing with my money.
[–][deleted] 3 points4 points5 points 3 months ago
Create automatic savings - if you have direct deposit, set up your banking so as soon as your paycheck is deposited, at least 10% goes straight away into a savings, which you periodically roll over into something simple like an index fund. This takes the same principle that makes credit card debt impossible to pay off, and works it in your favor.
(http://en.wikipedia.org/wiki/Compound_interest)
[–]PresidentSnow 5 points6 points7 points 3 months ago*
I am also your age but am from an affluent family. Open up an IRA (or a Roth IRA if your income is below the max) and put in the maximum amount allowed every year.
Don't spend over 40k for ANY car. You have no need to impress anyone. I drive a Honda Civic, and will be switching to a Toyota Prius. All the savings from buying a cheaper car should go into your savings.
Don't waste money on worthless products. You don't need the new iPad, the new iPhone every year, etc. Buy what you truly need and thats it.
Also, contrary to what you hear, USE CREDIT CARDS for purchases and rack up your cashback. Just pay it off in full.
Best
Edit: Also try to find more cheap forms of entertainment. For example, a movie ticket costing 10 bucks for 2 hours, is a horrible investment of entertainment per dollar. You're paying 5 dollars for 1 hour of entertainment. Compare that to me buying the Witcher Enhanced Edition for like 3 dollars and getting 30+ hours of fun out of it. Maximize your dollar...always.
[–]rnjbond 5 points6 points7 points 3 months ago
Being healthy is 75% diet, 25% exercise.
Similarly*, being financially secure is 75% savings, 25% earnings. stop buying $5 lattes and $10 sandwiches every day and save that money.
[–]DrDebG 13 points14 points15 points 3 months ago
My mother told me this one when I was in my 20s, and it's been very, very useful. When you have credit card or mortgage or loan debt, never just pay the minimum. Even if you pay just a few dollars more, you're that much closer to being out of debt. But if you just keep limping along at the minimum, you'll beggar yourself with the financing costs.
[–]anorexia_is_PHAT 9 points10 points11 points 3 months ago
That's old-school advice from when mortgage rates were high. Right now, with mortgage rates so low, you would be better off investing that extra money into the market, because over 30 years, you'll outperform the 4-5% cost of the mortgage.
[–][deleted] 9 points10 points11 points 3 months ago*
I'm only 26, but trust me, avoid student loan debt. I had extremely little and paid it off years ago...now, I'm in a much better financial position than most people I know. I know lots of people with poorly paying jobs and huge debt.
Education is great, but max out scholarships/go to a community college the first 2 years/go to a state school. And for heaven's sake, run from these scam for-profit schools. And they're basically all a scam.
Never forget that these loans are not dischargeable in bankruptcy. They are virtually impossible to ever get rid of, as long as you live. In that way, they're worse than credit card debt.
Other things:
Make all you can. People always talk about saving, and it's very true, but also focus hard on making the most you can. Ask for raises, change jobs to get raises, play one company off another, etc. The main reason I have more than most is this.
Don't ever buy a new car. 10 yr old Honda will do you. And pay cash.
Avoid all debt. Almost never a good deal. The people who do well with debt are guys like Romney who load a company with debt and pull their cash out...not the average Joe.
Save hard, and especially in your first years. Don't think "I can save later." You need an emergency reserve of cash ALWAYS. And compounded interest means that early saving benefits you most. I save the vast majority of everything I make, and I still live fine...you can too, if you make a decent living.
Think twice about buying a house. Consider if renting is cheaper. I could buy a nice house for cash, but I don't, because renting is a lot cheaper where I live. Also, a mortgage is slavery, nearly.
Don't loan money to people. They will screw you probably. And if you make a good living, people will ask, believe me.
[–]TheAdmiral416 2 points3 points4 points 3 months ago
When I was a teenager I read 'The Millionaire Next Door' and Suze Orman's first book, very practical reads and well worth it. Buy property as soon as possible & work down its mortgage as hard as you can, it may go up or down but it's better than the markets.
[–]oopsifarted 4 points5 points6 points 3 months ago
Dont be a dick. Advice no one gave me.
[–]probably_not_a_llama 3 points4 points5 points 3 months ago
Don't buy a house in/near Vancouver. Don't even think about it. It will cost you up to 10 times (not even an exaggeration) of any other city in the world.
[–]smifft 5 points6 points7 points 3 months ago
Compound interest: make it or pay it.
[–]classicalsyndrome 8 points9 points10 points 3 months ago
This was the piece of advice my parents gave me that really puts a nice perspective on things:
It's not what you earn, its what you spend.
[–]CrazyFisst 12 points13 points14 points 3 months ago
Buy land nigga!
Seriously, buy land. Because "god" aint making any more of it.
[–]nugget9k 2 points3 points4 points 3 months ago
I don't know why you got downvoted. It is the only thing guaranteed to raise in value
[–]timmyburns 3 points4 points5 points 3 months ago
Have some fun, but at 27 years old I can tell you that the money I spent on cars and electronics from the ages of 20-23 were a total waste. I could have went without a 2005 Subaru STi, new couches, a 50inch TV, new computers, and new cell phones and had just as much fun.
I wish I saved that cash. Not that cash gets tighter as you get older, it's quite opposite, but I now appreciate the things I buy a little more, so the same cash would have gone further.
[–]djfc 2 points3 points4 points 3 months ago
I'm 33, bought a condo at 27.
If I could do it all over again, I would've bought a business instead with that down payment money, and made a ton more money, and probably would be able to pay off my mortgage in 10 years instead of the 25 I have now.
But it's really dependent on whether or not you're willing to work for the money I guess....
[–]GratefulEd 2 points3 points4 points 3 months ago
I was financially independent and "retired" from my corporate gig by the time I was thirty-five because I followed these three principles:
-Work towards having something to sell besides your time. (Real estate rental income, royalties, capital gains, etc. In other words: find ways to derive income from renting out your capital and/or intellectual property.)
-Live below your means.
-Put compound interest to work for you EARLY. (Do your best to max out your 401-K, pay off your highest-rate loans first, etc.)
There's an excellent "retire early" forum here: http://retireearlyhomepage.com/phpBB2/index.php
[–]Valcgo 3 points4 points5 points 3 months ago
Don't buy stupid shit.
[–]Rabble_Arouser 9 points10 points11 points 3 months ago
Early twenties? Don't get married.
Give it a few years before you get married. Seriously, give it a few years. If s/he's the one, then they're not going anywhere. God forbid you get married early and then divorce -- your finances could potentially be ruined for a very, very long time. It's not just for financial reasons I say not to get married early (people's brains tend to stop developing somewhere in the mid-twenties) but since this is a thread about financial advice, I'll leave it at that.
If, for some reason, you do decide to get married so young, keep your books separate. Your finances should remain your own. You can, and should, pool your resources as a married couple, but keep distinct accounts.
Others in this thread have mentioned ways to save money for your retirement, so I will defer to them for that advice. It's important though, so save now, while you can.
[–]andrewsmith1986 9 points10 points11 points 3 months ago
401k
[–]mfarah 4 points5 points6 points 3 months ago
Spend less than what you earn. Don't become indebted in anything (specially credit card). You've lived on a meager budget as a teenager: keep it up. Sure, some things need more cash than before, but they're not that many.
The really important thing: SAVE AS MUCH MONEY AS YOU CAN. These are your prime saving-up years.
I'll say it again: SAVE AS MUCH MONEY AS YOU CAN. These are your prime saving-up years.
[–]ThisIsMyCouchAccount 2 points3 points4 points 3 months ago
Don't buy a new car when you get your first big kid job.
[–]desquibnt 0 points1 point2 points 3 months ago
Start saving for your retirement now.
[–]kimedog 2 points3 points4 points 3 months ago
From a guy who is 29:
Buy things when they are on sale/use coupons. Save enough money in an 'emergency fund' that could last you 2 or more months if you have no income. When shopping for expensive items such as electronics check reviews online. Spending $800 to have a tv break 1 year later vs $900 on a higher quality makes no sense. Buy only what you can afford. Keep in shape. You'll be happier, spend less on medical bills, and have an overall better quality of life. Start putting money away for retirement asap. Compounding interest means lots more money for retirement. Eating in is a lot less costly than dining out.
[–]Reddit_Account_2 2 points3 points4 points 3 months ago
OK, can't believe I didn't see this in the thread (I apologize in advance if I missed it). Pay yourself first. Basically that means that treat savings like a bill - ideally set aside 10% of your take home pay to savings. Take it out each month like it's a bill and before you spend on other non essentials. If possible have it deducted and automatically deposited into a separate savings account.
Also, as many have said - 401K, especially if your company matches.
[–]InspectorVII 1 point2 points3 points 3 months ago
Never take on consumer debt. If you can't afford it, don't buy it.
[–]Ramennov 1 point2 points3 points 3 months ago
Drop a portion of your paycheck into savings and never touch it.
[–]MsKim 1 point2 points3 points 3 months ago
NEVER get in debt. Pay cash for cars, pay cash for everything else you would usually use a credit card for, pay cash for college (which might mean it will take longer but that's OK), save up your money and pay cash for a house. You will be miles ahead of almost everyone this way.
all it takes is a username and password
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is it really that easy? only one way to find out...
already have an account and just want to login?
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