10. Emergency fund, rainy day fund, freedom fund—pick a name and start saving.
A cash cushion is one of the important pieces when building the foundation of your financial house. I have an emergency fund for myself and one for my dog. (I know—don’t laugh.) While I’ve been without incident, my dog recently got diagnosed with early stage heart failure and racked up about $500 in vet bills within a two-month period. So those savings came in handy.
11. Other people will spend your money if you let them.
There will be times in your life when you’ll feel other people are essentially spending your money for you (*cough* weddings *cough*). After two years of getting blitzed with wedding invitations, I learned how to tactfully say no to some. Sending a present helps ease the blow.
But I’ve also opened a savings account that specifically focuses on preparing for other people’s weddings, which allows me to say yes more often. It sometimes doubles as my travel fund if I actually get to take a vacation instead of just attend someone else’s event.
12. Once it’s serious, you have to get “financially naked” with your partner.
Did you just realize the person you swiped right on two years ago might be your soulmate? Then you better make sure you’re financially compatible by having an honest and non-judgmental money conversation. “Getting financially naked,” as I like to call it, with my boyfriend is how I learned how much he had in student loan debt, and when we began foundational conversations about how we’d handle money if we got married.
13. You might be your parents’ retirement fund.
It’s also important to do a financial check-in with your parents and other family members to find out if they expect your support in their later years. I’m grateful that my parents are transparent about their financial situation and are set for their retirement, but that isn’t true for everyone I know. Plenty of parents raided retirement funds to send millennials to college, which could mean those people will need to financially support their parents later on. It’s best to know now.
14. Your budgeting style will probably evolve.
You don’t need to stick with one budgeting style forever. Much like fashion, your spending and budgeting styles can change over time. That’s okay.
I used to be a big believer in the envelope system, but I gradually outgrew it to focus on the less rigid style of paying my bills and saving first, then allowing myself to feel comfortable spending the remainder without designated buckets. Since my income has risen drastically over the years and my lifestyle has mostly stayed the same, it’s never been a problem to give myself more flexibility.
15. Busyness is a huge threat to your budget.
While we’re talking budgets, be careful about falling into the busy trap. It’s easy to constantly eat out and mindlessly shop online for more than you need when you’re overworked and overwhelmed. Bulk-cooking on the weekend has become one of the ways I avoid ordering out when I’m busy—better for the budget and the waistline.
16. Estate planning isn’t just for the elderly.
Like most 20-somethings, I anticipate being around for many more decades. But unfortunately that isn’t always the case. Be proactive by having a will drafted, so your family doesn’t isn’t left guessing about your wishes in the midst of their grief. I got a quick and easy will done for less than $75 on LegalZoom.com.
17. It’s a good time to set up your beneficiaries, too.
Beneficiaries are the designated recipients of your money after you’ve passed away. You can set them up for your investments, retirement funds and even checking and saving accounts. It takes all of three minutes, and it means your money won’t be left forever unclaimed in the cloud (or wherever our digital currency lives).
18. Loaning money to loved ones is rarely a good idea.
This doesn’t mean you should avoid lending a helping hand. I have before, and I don’t regret it. But if I’m going to be forking over money, I mentally mark it as a gift, not a loan, in order to protect the relationship.
19. Personal finance is PERSONAL.
Ultimately, the biggest money lesson from my twenties is that personal finance is nothing if not personal. There is no single road map for navigating how to handle money, so it’s important we respect the journeys of our friends, coworkers and loved ones alike. I make it a policy to only offer in-person advice when asked. (And you asked, right?)
December 20, 2016
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