How to Become Financially Stable in Your 20s

One surprising thing I've realized with talking with other people my age is that many people have not learned a lot of what they need to know about personal finance from a high school or college education. In this article, I'll give you practical tips I've learned on how to become financially stable, even if you're just starting out in your late teens or early 20s.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• The desire to become more stable financially in your 20s

1. Even as early as your teens, it's a good idea to start reading about how personal finance really works. With rare exceptions, this isn't something you're going to have an opportunity to learn from high school or college. I'll include below a list of books and resources below that can help you.

2. The next step is to come up with a written game plan for your money. This would likely include a budget as well as long-term goals that you want to accomplish. If you want to do something most of the population isn't doing, such as "retire" with money in your 30s or 40s, you have to plan way ahead of time. If anything, it's wonderful just getting yourself in the position of doing something you love and being in control of your money, as opposed to the paycheck-to-paycheck cycle people get trapped into.

3. It's not going to be overnight, but you'll have to take some action and likely make some changes in your life. The math of it is very simple: reduce your liabilities (debt) and find ways to increase your income over time. Books will help show you how to do this, as well as getting around people in your life that manage money well. You have to be patient and don't get discouraged about not being perfect at it. What matters is you keep going forward.

Tips & Warnings

• What's really great about this is after you get through an initial time of really hard work, the process becomes fun. I think more creatively and have less stress in my life now than when I was trying to be like everyone else. I think sometimes you just have to give yourself permission to go out and do something most people aren't willing to do.

Resources

• Life Skills/Success Resouces List
• Index of Cougar1002's Articles (Sorted by Topic)
• Cougar1002's Author's Blog (For Updates/News/Latest Articles)
• Recommended Reading: The Total Money Makeover by Dave Ramsey
• Dave Ramsey's Website (Has a Lot of Free Resources)
• Recommended Reading: 48 Days to the Work You Love by Dan Miller
• Dan Miller's Website (Has Career Idea Resources)

[mbertani]

on 4/21/2008 This is a good article. I agree, it's a shame young people aren't really taught about personal finance in school or college. It's one of the most important lessons we have to learn in life and it's sad it has to be done the hard way. Your article would be more useful if you could be more specific about the basics of personal finance, and also how to build good habits early on, such as staying away from debt, being a conscious consumer, saving when possible, etc. Keep up the good work though!