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    What I Would Say to 20-Year Old Me About Money

    It doesn’t seem like it was that long ago that I was in my twenties, but the reality is, it’s been %$# years.

    My 20s were chockfull of memories, transformations, and lessons. Some of the hardest lessons I had to learn (sometimes over and over again) were financial lessons. Whether you have a strong financial literacy educational background or not, for some of us, the impulsivity and immaturity of our twenties can lead us to make some significant financial missteps. If I ever had a chance to talk to 20-year old me about money, I’d have a few key tips:

    1. B-U-D-G-E-T

    One thing that I’ve learned since sailing past my 20s is that it doesn’t matter if you make $10,000 or $100,000; if you don’t know how to budget, you’ll never have control of your money. For some people—myself included at one time—a budget can feel like your control is being taken away, when in actuality, a budget puts you in the driver’s seat of your finances. Instead of your money telling you what to do, a budget allows you to tell your money what to do.

    If given the chance, I’d tell my 20-year-old self to create a realistic, attainable budget; to spend less than I made; and to be honest with myself about what my spending habits really looked like instead of putting my head in the sand, going to brunch, and swiping my debit card.

    If you’re in your 20s, or if you know someone in their 20s who could use a little financial guidance, my advice is to create a budget that is aimed at helping you achieve your goals, but is still flexible and comfortable enough to allow you to enjoy the fruits of your labor. Then, make sure you reevaluate every so often to make sure everything is on track—particularly if your income or expenses change.

    2. Be prepared for an emergency

    One flaw many youths possess is the feeling of invincibility. The fact is, emergencies will happen. Your car will break down. Your furnace will go out. You might have some type of health emergency or need to hop on a flight to be there for a family member or friend. It’s important to have an emergency fund to help finance these type of expenses so you aren’t forced to use credit cards, borrow from your parents, or take on other forms of debt to pay for them.

    3. Don’t misuse credit

    I got my first credit card when I was a freshman in college. It had a $10,000 limit and I made about $7 an hour at my part-time job. Back in those days, there were no regulations in place to shield students and young people from predatory lending activities, and in hindsight, I actually dodged quite a bullet. While I certainly misused that credit card, I never got close to the limit, but so many 20-somethings fall into the credit-card-debt-trap, charging far more than they can afford to pay each month. The average American household carries a $5,700 credit card balance, and although the percentage of Americans who carry credit card debt has declined over the last decade, consumer debt can still be problematic if not managed responsibly.

    If given the chance to talk to my 20-year-old self, I’d tell her to generally avoid credit cards altogether and to only borrow responsibly.

    I’d like to think that 20-year-old me is proud of the financially responsible 30-something I’ve become. I’m grateful for the missteps and learning lessons I experienced because they prepared me for a more financially stable future.

    If you could talk to your younger self about money, what would you tell them? Share a comment below!

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    Financial Planning Life Events

    Victoria Penn

    Victoria Penn is the AVP of Marketing for SWBC. She manages a team that develops traditional and digital marketing strategies for SWBC's lines of business.

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