5 Financial Commandments to Follow in Your 20s

Financial Commandments

First commandment: “Thou shalt not be financially broke forever.” 

Your 20s can be a series of firsts. First job. First investment. First expense from your first hard-earned money. In other words, welcome to Level 1 of financial independence! Congrats. You’re on your own now ‒ moving out of home, handling your own money, dealing with a shared bathroom sink, surviving on a noodle stash… and eventually striving for the family that you are about to build. That’s when adulting becomes a trap. 

A series of greater life decisions await you in your 20s. And with every decision comes failures and victories. Sure, you’ll be making tons of financial mistakes while you’re young. But that’s okay. Even those in their 50s or 60s are making huge mistakes and having regrets too. But what matters is how you cope up and learn from those slips in life. 

Frankly, with all the “first times” going on in your life right now, it would be so overwhelming to reward yourself by splurging all your money only to wake up at your favourite Gaelic bar. But your 20s is also an important time that you have to collect yourself up and be responsible for your own future. 

Thinking about the future can be terrifying. However, the earlier you set your financial goals for a ridiculously distant future is the brighter life you’ll have. And I swear that’s exactly what your 50-year-old self would say to you too. So, here are some financial imperatives that you should be following by now if you want to make your future self grateful and proud of you.  

Thou shalt develop a marketable skill. 

Let’s face it. Your first job may not always be your dream job. And that you may not love it anyway so you’d probably take one job over another and do the same thing if you think it doesn’t work out. But whatever position you obtain, the key is to always make the best out of it. Remember that before you worry about how to handle your finances correctly, you need to earn some cash first. Your job alone may not always help you achieve your financial goals so try to develop a marketable skill that will empower you to earn more. Do not be afraid to experiment while you’re young because your 20s could be the best time to unlock new skills of which you’ll get greater opportunities and bigger returns down the road.       

Thou shalt establish a strict budget. 

Once you are bringing home the bacon, you need to start thinking of how to slice it up correctly. One of the most efficient ways to maximise the use of your earning is to set up a strict budget that will help you allocate your income in a smart way. Monitor your spending and follow the traditional 50/30/20 rule to guide you through a better spending style.    

Thou shalt get insured. 

Several financial experts are advising that early 20s is the best time to invest in your future when life insurance premiums are relatively lowered and you still have a long runway to save up for future expenses and other obligations. It goes without saying that the cost of life insurance plans is continuously rising as you age, which is why it really makes plenty of sense to get yourself insured while you’re young and premiums are more affordable. 

Thou shalt build an emergency fund. 

This is probably the most common financial advice you’ll hear today. An emergency fund is something that you’re supposed to use when abrupt situations come up. Financial experts may have different perspectives and pieces of advice but all of them would pretty much agree that having money that is set aside for emergencies is an important component of financial health and this should be practised as early as your age today. 

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