I have been in my 20s for several years now. At 28, I have nearly achieved expert status on the topic. Contrary to popular belief, I would argue that your 20s rather than your teens, hold the real potential to be the best years of your life.
Most people have freedom in their 20s like at no other point in life prior. You have graduated high school, which has been your primary time commitment for years. You have all of the time in the world, few ﬁnancial commitments, and hopefully your health.
I had fun in my 20s. Travelled to some amazing and exotic places, dabbled in college just long enough to know that itʼs not for me, married an amazing woman and had a wonderful daughter. I also made some serious face-palm worthy ﬁnancial decisions, rendering myself broke on more than one occasion, spent way too much time with the wrong people and am still struggling through what Iʼm called to do with my life. I offer to you my insight on a well-lived 20s with the hope that you can take away something worthwhile for your life.
Learn how to budget and save for your future
BUDGET! Itʼs not what most people want to hear. The word “budget” seems to have equivalent appeal to nails on a chalkboard to young people today. We live in a world that worships immediate gratiﬁcation and our instant access to everything makes it difﬁcult for young people to prioritize budgeting to save for a far-off future. It is however, of paramount importance that you start saving and develop that habit early.
I highly recommend reading Dave Ramsayʼs book The Total Money Makeover and Financial Peace Revisited. If you follow the advice in those books throughout your 20s, you will build the tools to keep yourself in a good ﬁnancial position for the rest of your life. It is far more difﬁcult to build good ﬁnancial habits after spending a few adult years just spending your money on whatever shiny thing catches your eye. You donʼt know where youʼre going to be in ten years but what I can tell you with absolute certainty is that if you have saved some money, you will have more options than those who save nothing.
If you can manage to save just $150 per month through your 20s, you will enter your 30s with a ﬁnancial cushion of $18,000 not including any interest you may earn on that money. I can promise you that few of your friends will be in such an advantageous ﬁnancial position at that age.
Don’t buy a new car
Hereʼs something nobody will tell you: A new car will cost you far, far more money in the long run than a decent used one. A new car is the second biggest hole you will ever dig to throw money into. Donʼt even go to a new car dealership. Car salesmen are world-class professionals at separating you from your money. I have bought three new vehicles in my life and they have all been a waste of money. I told myself that I need something reliable and that a new car would be better on fuel which helped me justify the cost of regular car payments. I learned after my three month old truck needed a clutch (twice), a computer, and several other repairs, that a new car is not necessarily more reliable. A new car wonʼt save you much in fuel either. For example, a base-model 1995 Honda Civic gets the same fuel economy as a 2012 Civic.
If you can save even a few thousand dollars, you can buy a car that will last you ten years. There are tons of low-mileage older cars around that are more basic than what you will get new, but will last you through your 20s and only cost you a minimal amount in maintenance. Recruit the help of a mechanically inclined friend or parent, not a dealer, to help you ﬁnd a good, older car.
If I canʼt talk you out of buying a new car then at least do this. When you go to a dealership to check out cars, bring a couple of friends and instruct them both not to let you buy that day. Find the car you want and ﬁgure out what the payments will be. For one year, take those payments every month and put the money into an account to be sure that you can afford to lose that money. If after a year you are conﬁdent that you still want to buy new, use the money you have saved as a down payment. That will lower your monthly cost and get you some equity in the car so if you have to sell it, you wonʼt have to pay thousands to do so!
You don’t have to buy a house
Hereʼs something your parents probably wonʼt tell you: you donʼt need to own a house. You could live the rest of your life happily in a rental house. There are other places to invest money and as the recent ﬁnancial crisis has shown us, there is no fool-proof investment — not even real-estate. Iʼm not suggesting that you never buy a house, just that you see it for what it is. Itʼs a home, not an infallible blessing of an investment that will someday make you rich.
After watching a friend struggle under a mortgage payment that he couldn’t really afford, my wife and I have decided not to buy a home until we can buy a place that we can afford. That means saving for a really long time and potentially moving farther from town where housing is more affordable. Itʼs not what we really want, but thatʼs life. Sometimes we canʼt afford what we really want and need to make sacriﬁces. Rent, save, and wait. You will be able to buy someday.
In the meantime however, renting has a lot of beneﬁts. Your costs are ﬁxed and there are rarely surprises. If something should break, you simply pick up the phone and call
your landlord and they will deal with it, itʼs not your problem. You also have far more freedom to pick up and leave for travel or move if you want without having to worry about renting your house out or selling it.
Marriage and kids don’t have to ruin your fun
There are lots of reasons to believe that marriage is the end of all things youthful and fun in your life. The phrases “ball and chain”, “tied down,” and “neutered” come to mind. I heard all of this when I decided to get married. Most of it I now realize, came from those who have never been married. I have had more fun living with my wife than I ever did single. She makes great company for travel, dinners, and just about everything else.
The same is true of having children. Our daughter has been the biggest blessing in our lives together. Contrary to popular belief, she hasnʼt really stopped us from doing any of the things we would do had we waited to have kids. We wanted to travel to Hawaii when our daughter was 6 months old. We put her in the baby-backpack and off we went exploring Maui, and the Big Island with our little girl. It was an awesome experience.
I think every 20-something needs to do some traveling. Immersing yourself in another culture and seeing that not everybody lives the way that we do changes people. It has the potential to broaden your view of the world and change the way you live your life at home. Other cultures have a lot to teach people young and old about values and priorities.
I especially recommend traveling to a developing country. It will change you. Nothing can make you thankful for the blessings in your own life the same way that meeting people who donʼt have enough food or water can. Itʼs one thing to see images on World Vision posters but itʼs another entirely to actually go to some of those places and meet people who have so little face to face. Itʼs an experience I wouldnʼt trade for anything.
Few things in life have been more rewarding than serving others, and many of todayʼs young people donʼt have a clue what that means. No you canʼt serve others from your xbox and to my knowledge, thereʼs no app for that. Service is simply to give your time, and expect nothing in return. A couple of years ago my wife and I helped out regularly with a Friday night dinner for the homeless in Victoria. We got to know some of the regulars and grew to enjoy the experience of giving our time and effort to that ministry. Serving, especially in uncomfortable situations, builds character in ways that nothing else can.
Do what you’re passionate about
The career decisions that you make donʼt have to be forever. If you really want to work for a non-proﬁt, travel around as a cook on a cruise ship or try your hand at online business, go for it. You donʼt need to follow the conventional life plan even if your parents are pressuring you to. Colleges will still be there in ten and 20 years should you decide to go back. What wonʼt be there in 10 years are the 10 years you wasted living somebody elseʼs dream. Whatever it is, if God has placed a passion in you for something, I promise your life will not be ruined by spending time on it.
I admit that Iʼm a bit of a hypocrite on this one. I have worked jobs that I loved in the past but Iʼm not in that place now. I am however, working towards the things that are important to me and I will get to the point where I can pursue them full-time.
How you live your ﬁrst decade as an adult will shape your habits forever. If you commit to developing good habits in your 20s you will be far more successful for the rest of your life.