Updated: May 19, 2021
Ah the 20s, what a wonderful time in your life, exciting for some, terrifying for others, I mean you gotta start adulting at some point, right? While some lovely gals, myself included, prioritized living in the moment through this magical decade in your life, making these easy peasy money moves will put you on the money queen track for the rest of our life, no lie!
Between finishing school and starting your career, finding the right jobs, relationships, moving out, maybe even starting a business, tax filing(?!), that’s a lot to handle! Meanwhile, we are still kids at heart and want to enjoy our new "adulty" freedom, I hear you, darling.
So, to make your finances flow smoothly, I compiled the top 5 money queens moves you need to make in your 20s to en sure you don’t freak out later on, trust me, this pays off!!!
Bonus: Want to know how to make as much money as you want and live life on your terms? Subscribe to my email list and get my tips and secrets right in your inbox
1. Cash flow, baby
As much as I can’t wait for you to be raking it and making the income you desire, you gotta start by understanding how your money flows. There are some main categories, but everyone’s got their own specific blend of how they make and spend their money.
Start with the easy part- inflows. What’s coming in? Compile all sources, your job, any side-hustle you may have, any freelance work you may do (yes, babysitting still counts, nannies can make some good moolah!) all the way to a tax refund. Compile all that in a pretty spreadsheet
Next - outflows. This is where it can be tricky, but this is what you absolutely need to grow your awareness. Ever looked at your bank account at the end of the month and wondered “where did it all go?!” This is how we find that out. Now, no shame in your game, you’re just becoming conscious of your money habits, this will help you plan out our life and finances much better. You don’t need to sacrifice, but you do need to know how you enjoy spending money so you know how much money you actually need to be satisfied (p.s. According to research, it’s about $70k-$80k). Compile a list of all your usual expenses, how much your spending and then organize by category. This will give you an empowering overview of your cash flow!
2. Handle Debt
No one likes to talk about it, but real talk time, we gotta handle it asap. The dirty little secret is that it will continue growing and eating away at your income. You will grow professionally, you will make more money but you won’t necessarily be richer unless your income stops flowing to cover debt payments. This is the time where maybe you’ll choose to buy your own wine rather than pay over-inflated drink prices at a bar and redirect that cash towards your debt.
The big edge is to pay more than the minimum, there are tons of strategies, many which we will be writing in this blog, so make sure to subscribe! I was able to pay down $7k in debt in just 1 year by prioritizing. Trust me, you’ll throw an epic part when you’re free of those darn interest payments.
3. Begin Investing
Ah, another topic most young ladies want to stay far away from. Time to shift that mindset, babe. Money is power and money grows, you gotta start planting some seeds and watch your financial garden of Eden bloom. Start with whatever you got, seriously, even $10 a month, the key is to start building the habit. A lot of people talk about saving money, well saved money won’t do much for you if it’s not being put to work, because of inflation, money in your piggy-bank is actively losing value, so it’s all about building the habit of stashing away a portion of your income but also making it work for you through investing.
Your beautiful age is your biggest advantage financially, while you may not be making all the money in the world yet, you absolutely can if you learn to compound, that means earning interest on interest, multiplying your income!
4. Emergency Fund, yes you need one
When something unexpected happens, and trust me, it will, you will likely need some cash. From a medical emergency, to a car breaking down or your income suddenly stopping. The typical advice is to have 3-6 months of living expenses, if that sounds like a joke to you, aim to have $1,000 put away.
5. Employer contribution match
For those money queens who are employed, getting into your employer’s contribution match program is a must! This is free money you cannot afford to pass! So many times, at this age, we prioritize living for the moment and we postpone contributing to our retirement accounts. Here again, it’s all about a mindset shift. Remember, you are actively building your financial success and your employer will help you do that by pitching in! Most plans will allow for a 50 cent contribution for every dollar of your salary you place in your company 401(k), usually up to 6%, though every employer has their specific plan details. There is no good reason to turn down free money, you’ll be thanking yourself later, I promise!
Making these 5 money moves in your 20s will certainly place you on the path to financial success. You will grow, you will increase your income, but you’ll never be able to make up for the time lost, make the most of these wonder years by developing money queen habits!