6 Ways Not To F— Up Your Finances Before You're 30

MSNMoney has 6 financial milestones that you should try to reach before you’re thirty. Make note of these and you’ll have a head start to personal finance bliss.

1. Stop with the credit cards already!
MSNMoney says that the average credit card debt among 25- to 34-year-olds was $5,200 in 2004. You should be saving in your 20s, not spending.

2. Plan for home ownership. Save for a down payment, then buy what you can afford — not what you love.

3. Have skills. “Everyone’s really self-employed. If you work for a company, you just have one client,” says Gregg Fisher, 35, founder of Gerstein Fisher, a New York financial-planning firm.. “If they fire you, you’re out of business.”

4. Give to charity. If you buy things to make yourself feel good, why not donate some money to charity instead. Won’t that make you feel good?

5. Know thyself. “Having a firm grasp on your priorities and values is one critical component of a healthy financial life.”

6. Know smart people. “Knowing a good tax preparer, financial adviser, attorney and insurance agent can save you untold amounts of money and stress.”

You can read the full article here.

We’d also suggest a few more specific steps, like start investing in your retirement and build up an emergency fund that’s liquid — 6 months of living expenses in a high interest savings account is great. What else should people do before they’re 30?

6 financial milestones before 30 [MSNMoney]
(Photo: AdamOndi )

Comments

Edit Your Comment

  1. hewhoroams says:

    Even some basic bookkeeping and financial management is a good idea in your 20′s. Keep track of what is coming in, and what is going out on a monthly basis. It helps deter you from dropping $1500 on a new TV on the spur of the moment.

  2. rachmaninov1 says:

    You should be saving in your 20s, not spending.

    It depends.

    If your post-20′s income is likely to much higher than your 20′s income, then you should borrow and spend while you’re young, healthy, and have the free time.

    You should go to Paris in your 20′s, not in your 80′s!

    • mac-phisto says:

      @rachmaninov1: completely agree & i would expand with, your 20′s are the best time to make investments in your future (i.e. -> borrowing money for graduate school, professional certifications or to start your own business). making those investments at a young(er) age amplifies their value over time.

      definitely put the credit cards away, unless what you are using them for generates future wealth (& no, that’s not an endorsement to start your own business selling cutco door-to-door).

    • Colage says:

      @rachmaninov1: You took the words right out my my mouth – I’m not saying that people in their 20s shouldn’t be saving, but I think if there’s any time it’s okay to fudge a little on the savings is when you’re not making as much as you will be later in life.

    • gparlett says:

      @rachmaninov1: This attitude is exactly why we’re in the financial crisis were in. Spending money you haven’t earned yet because you want to enjoy life now and simply assuming that some magical super-career will come along later to bail you out with a a high income.

    • @rachmaninov1: Amen. I lived beyond my means, and had a hell of a good time of it, during my 20s, knowing that I would make a lot more money in my 30s to pay it off. Sure, I may have paid tens of thousands of dollars in interest and in the opportunity cost of not investing for retirement, but I’d certainly rather work a couple of extra years during my peak earning period and have the wonderful experiences of my 20s. Youth is sort of supposed to be misspent, no?

    • battra92 says:

      @rachmaninov1: I never knew there was a right age to go to Paris. I mean there are dirty cities everywhere. ;)

      Since I’m planning and expecting to never have kids I will at least be able to do some of that big stuff in my 30s.

  3. BrianneG78 says:

    Since I’m turning 30 in just two months, I feel a little behind on this list. As of next week I’ll no longer have any credit card debt, but I still owe on my car and a large amount of student loans. (Luckily, they’re deferred as I work on a master’s part-time.)

    The credit crunch and listening to Dave Ramsey has really made me want to get out of debt and do it fast. I don’t want to end up like my mom, with a mortgage and a second mortgage and a lot of credit card debt in her 50′s.

  4. K0MMIE says:

    Tip #4 is a lie.

    • dorianh49 says:

      @K0MMIE: and what about the cake?

    • MoreFunThanToast says:

      @K0MMIE: it is, how can I feel good about giving to charities when I need to worry about my own debt AND savings?!

      • freelunch says:

        @MoreFunThanToast: nobody ever wants to give even a penny to charities when they are hurting for money… but your spending habits when everything is “me, me, me” can be quite bad.

        donate at least 1% of your post-tax income to charities… that is a very small number, but at least you will do something.

        If you feel like giving $1 a day is too much, why don’t you look at what changes in your living styles would save $2 per day (like a more affordable apartment). Giving away such a small amount of money is mental difficult, but not fiscally.

        • Gann says:

          @freelunch: If I want to use a little extra money to help someone, I’ll buy someone I know something they need/want. I don’t trust charities, and giving money to them removes you from the real enjoyment of your good deed.

        • MoreFunThanToast says:

          @freelunch: It is not mentally difficult for me to give, I’ve donated plenty of clothes, toys and canned foods to charities. Personally I don’t trust my money with them.

          And in regards with my spending habits and my “unfordable” apartment, I am currently renting a living room in a 1 bedroom apartment. I am far removed from your notion of “me me me me” spending habits. In order to pay off student loans, and credit card debts from buying materials, I am trimming off all unnecessary spendings, INCLUDING cable/land lines. So no, you dont get to judge a stranger’s spending habit.

  5. StewartStrabo says:

    This article seems a tad too… extreme… It basically recommends that you aren’t stupid and have some form of social aptitude.
    It’s also been established time and time again in this and other personal finance sites that home ownership isn’t the best option for everybody.
    I also agree with Rachmaninov, as long as you aren’t stupid with your finances, if you can afford that Honda 1000RR, go buy it in your 20s because when you’re 40 you’ll be saying things like “i can’t ride for too long anymore because my buttocks hurt”

  6. outinthedark says:

    What does that autobot transform into?

  7. This makes a ton of sense to me, and I’m already on top of most of that except the planning for home ownership… Not really sure where I’m going to go with that after college. I know that one day I’m going to end up owning the family home, but that could happen at any point over the next 20 years or so (I’m in college now).

  8. QuiteSpunky says:

    I’ll run out and try to make friends with an attorney, pronto.

    Aside from getting/staying out of debt the rest of this list is nothing utter palaver. As Rachmaninov1 noted above, isn’t being young the time to do things you won’t be able to do later? I taught English in Europe for a year when I was 26, and it was one of the best experiences of my life. That’s something that is a lot less likely to happen when you’re 40 and have a mortgage and children.

    Also, beyond debt, the one thing people in their 20′s could do to contribute to their financial well-being isn’t even on this list: invest in a 401k or Roth IRA.

  9. sodium11 says:

    #2 is questionable too. There are plenty of resources out there that can help you determine if renting or buying is a better plan for you.

    The New York Times has a good one. [www.nytimes.com]

    The renter -> homeowner conveyor belt is a creation of government policy and conventional wisdom, that doesn’t always work out to your advantage.

  10. CaliCheeseSucks says:

    4. Give to charity. If you buy things to make yourself feel good, why not donate some money to charity instead. Won’t that make you feel good?

    Really? Giving to charity is a way not to fuck up your finances? I’m calling BS on this one. Yeah, it’s a nice thing to do, but it doesn’t help your finances.

    • leprendun says:

      @CaliCheeseSucks: I agree. I always see this answer on these save money things and it drives me nuts. You are essentially throwing away your money and getting nothing in return. No, I don’t feel good about giving away my money to a charity that will keep 50% of it to pay their employees.

      I disagree with #1 as well, to an extent. I use my credit card instead of a debit card to make normal, daily purchases and pay it off at the end of every month. No fees, and I get Amazon gift certificates when I spend a certain amount of money. I imagine I’ve made about $200 over the past two years.

      • mac-phisto says:

        @leprendun: then here’s a novel idea: pick a better charity.

        note that this is not a “how to be rich” post, this is a “grading your maturity” post. giving to charity (whether it be time or money) reflects the desire within to do more than just work & leisure.

        • EYESONLY says:

          @mac-phisto: Exactly. Charity Navigator is a good site (rates a ton of non-profits based on how efficiently they use donations).

          It seems to me some of the posters are missing the point. If the question is, “Will I save more money by putting $30 toward long-term savings each month, or by donating it to charity?”–well, duh, the answer’s kind of obvious. But 1) I don’t think that was the question, and 2) it’s all too easy to use “But I don’t have enough money right now!” as an excuse to put off giving to charity indefinitely.

          I used to tell myself I “didn’t have enough money” to give to charity either. Then I did some traveling in the Third World, and got a better reminder of what poverty and hardship really look like. I still don’t give as much to charity as I hope to when I’m more settled (I’m still a student)–but giving something helps me keep my head screwed on a little better… it’s a small gesture of thankfulness for the things one does have. I’m not saying every single person in the First World is in a position to donate money, obviously–just that if you’ve been telling yourself “Oh, I’ll wait till I really have money/can take the tax deducation/whatever,” for a long time… then it’s just possible you’re fooling yourself.

    • bunt says:

      @CaliCheeseSucks: while i agree that charity wont help with your finances, cant you deduct it from your taxes and use that as a break? money going out is money going out.

    • thesadtomato says:

      @CaliCheeseSucks: Throwing your money away means you’re wasting your money. Giving it means YOU get nothing in return (except a tax-deduction) and someone who has less than you gets something they need. Give to the non-profit I work at and you’re sheltering a victim of domestic violence, or providing materials for a consumer credit counseling class (a free service we offer) or giving a child a bed in a group home instead of a night in juvie. How do I get paid? It’s sure not from donations. We make payroll by providing fee-based services, in addition to free social services.

      So yeah, you can keep your money. Or you can find a cause you care about and donate a $100 this year. Which most people (even us underpaid non-profit workers) can afford. But you’re kidding yourself if you think non-profits pay employees from their annual giving fund (cash they get from generous people.)

    • @CaliCheeseSucks: I agree. I love animals and have a few charities that I would give to if I could see that benefit in my taxes. But since I don’t make a ton of money (in my mid-20s), and I take the standard deduction, I’m not giving to charity right now. And dammit, I need that money. I have a student loan, I want to go on vacation, I’ve got bills and all of that costs more since the economy is on the slide.

      The tip should be donate your time to a charity, not your money. I’d give up a Saturday to socialize cats, but not a day’s pay.

    • jeknee says:

      @CaliCheeseSucks: I feel like the point on this one is, rather than get into the habit of spending money on stuff you don’t need as a high, maybe try giving money to a worthy cause instead? It’s not about donating when you don’t have money, it’s about learning not to throw your money away to feel good.

    • Davan says:

      @CaliCheeseSucks: Actually not true. Donating items to Goodwill allows you write them off of your taxes, and theres very little in the way of checks and balances to verify that the values you assign to donated goods are accurate. Once I graduate and own a home, Im going to purchase a pickup and make runs to apartment dumpsters on the weekends. People leave furniture, televisions, home goods etc in perfectly good condition. Haul em to the nearby Goodwill, mark it down on the donation report, and earn yourself a couple hundred dollars write off each weekend.

  11. ret3 says:

    I’m 30 and a half, have an Autobot icon, and have done all of those but #6. Good for me!

  12. savvy999 says:

    Why would someone in their 20s need a lawyer or a tax preparer? If you are unmarried, childless, and mortgage-less, the hardest tax form I can imagine a 20-year-old needing to fill out is a schedule D (capital gains) or form 3903 (itemizing moving expenses). Neither of which require a tax preparer.

    Unless you have vast assets already, what’s the need for a lawyer or estate plan?

    Even if you do have some combination of spouse/loinfruit/moneypit, use TurboTax (or whatever tax software package) anyways. Skip the lawyer (unless you plan on criminal activity) until you have beneficiaries, or something to actually pass onto them. A living will for a healthy person in their 20s is to me a very suspect use of funds.

    • EYESONLY says:

      @savvy999: Taxes can be tricky for freelancers, at any age. I did my own even when I freelanced part-time, but a friend who did the same wound up paying a ton of fines/fees for various mistakes she made filing as self-employed. She uses a preparer now.

  13. lalaland13 says:

    As for number six, my mom is pretty much all those things, except maybe lawyer. She advises me on my finances like this: My mom filed for bankruptcy after divorce, and it was a living hell. So I think to myself “Never ever file for bankruptcy” and live life so I won’t have to. I have low credit card debt and not-low school loans, but nothing I can’t handle.

    I disagree with number two as well, for reasons others have stated. If you’re at the beginning of your career, you probably aren’t going to be able to save much. Well, at least if you’re a liberal arts major.

  14. TheFuzz53 says:

    Why is give to charity always on these lists? If you aren’t currently saving up to purchase a home or something, how does giving to charity help that cause?

    Maybe I’m just a cold-hearted prick, but who really trusts giving away money to anyone that says “it’s for a good cause?” If I want to be charitable, I’ll do it myself instead of just throwing my money away to somebody that says they’ll do it for me. Forget wasting your cash. If you want to do something charitable, donate time you would have spend sitting on the couch.

    • edosan says:

      @TheFuzz53: My favorite charity? Me.

    • Outrun1986 says:

      @TheFuzz53: I have a better feeling about giving a product to a charity than I do giving money to one. I would rather donate cans of food or toys to toys for tots, you have a better chance of the item actually getting into the hands of the person who needs it. Anyone can intercept a donation of money, and unless your giving an extremely desirable toy there is very little chance of your donation getting stolen. A 10$ donation in toys or a 5$ donation of canned food once a year isn’t going to break your budget. The local food bank who actually gives back to the community and does not advertise would probably be very grateful for the donation.

  15. Ben Popken says:

    I have nunchuck skills.

  16. MoreFunThanToast says:

    The only tips I really agree with are #3 and #5.

    For #1, most of my credit card debts, or debts in general comes from student loans and material purchase for my class. I personally think 20s is a time of investment, and to take out loans for school. I’ll worry about savings once I actually start making money.

    As for #2, with all those articles these days denouncing the American dream of home ownership, why are we promoting that in this list? Home ownership is not for everyone.

    #4: NO. It’s a nice thing to do, but I just don’t see how that helps with my fiances.

    #6 at this point of my life, it is more useful to know people in the IT field so I don’t have to blow money on fixing computers with Geeksquad or the like than lawyers and tax people?

  17. I’ve read this list in one form or another time and time again… and while it’s all good for those of you who are still in your 20′s what I’d really like to read about is:

    “6 tips on what to do financially now that you’re 30 and you already have a kid that you weren’t planning for when you were 20 and you’ve had to file bankruptcy at 26 because you were 25K in Credit card debt because you didn’t listen to what your parents and everyone who was smarter than you said 10 years ago and you’re making a decent living now but still living paycheck to paycheck”

    because I know more people in that type of demographic than the former… myself included

    • Outrun1986 says:

      @bucklefilledbird: I knew people who had 10k of credit card debt when I was in community college, or more. This was a very young person, barely 20. He wanted to buy into a scam that would help him get rid of his debt and I had to take him to the office of a trusted professor so that he got an explanation of why he shouldn’t do that!@TheFuzz53: @bucklefilledbird:

  18. chrisjames says:

    I’m wondering if maybe #4 is a cleverly hidden wealth distribution suggestion. Obviously, if we’re saving as a nation, the poor aren’t reaping our rewards (at least not as directly as some would hope).

    On the credit cards. We, personally, make so little in our mid-twenties that it’s tough to go credit card-free. We make enough to pay bills, save a bit, and get some goodies for ourselves each month. Though, instead of risking accidentally overdrawing our checking, or falling back on savings in a pinch (bad idea, by the way), we use credit cards for most daily purchases. It compartmentalizes and structures the random spending that occurs. It also makes it so much easier to see where we’re spending our money (a surprising amount was on snacks on work days).

    Having had success with this for a long time and paying little for it, I disagree with the notion that converting credit card charges to debit or cash transactions is more financially responsible, as the article implies. It only draws the checking account, your real source of money, closer to zero. It doesn’t address spending habits (for instance, those snack charges turned into more frequent ATM withdrawals), especially if you need backup credit for “emergencies.” Tips like “save each $5 bill” seem to work better. Discipline is paramount.

  19. Home ownership is great and all, but what about that 20-something who saved up for a down payment and bought a house in 2006? Fucked now. (If he/she needs to sell.)

    • madanthony says:

      @Valerie Flame:

      Hey, that’s me!

      I did buy a house at age 25 in 2006. I have a fixed-rate mortgage and put something down, so I’m not about to get kicked to the curb, but every now and then I start to think I’d like to pursue a different path life-wise, but can’t because I can’t sell my house without bringing a large check to closing.

  20. DashTheHand says:

    I kinda hate this list, and can tear apart each one of the overly broad, generalizing points made, but I’ll just do a couple.

    Credit card debt for me is my school loans sitting on a MUCH MUCH lower interest rate than Sallie Mae was trying to rape me for. Oh and the added bonus that if I want to pay the loan off early, I don’t have to pay the additional interest that Sallie Mae would have still demanded had I paid off that loan early. Thanks SM, for screwing students.

    Donate to charity? Really? Isn’t the goal to save money? Look, I know people are in need, but if you’re living on ramen and mac n cheez, you’re going to be the one needing charity. I have a bit of extra money each year I donate to my local animal shelter in the way of going to the salvation army and buying a bunch of towels and blankets for the animals. I also buy a few huge bulk drums of food for them and donate some squeak toys. It makes me feel good without crushing my wallet and I know that the items will be put to use instead of the money possibly “disappearing.”

  21. While I’m at it, leprendun is right – have credit cards. Have several of them, with no annual fees. Keep them for a long time. Just don’t run up a balance. Pay them off.

    Put EVERYTHING on them. Purchase gum on them if you can. Then trade in reward points for cash, or a gift certificate to a store you ACTUALLY shop at, if its of better point-redemption value.

    I just traded in 10,000 points for a $100 check and felt pretty damn good about it.

  22. Tallanvor says:

    #2 is mostly bullshit. If you’re under 30, and especially if you’re still single, buying a house is not a good idea, although saving to buy one sometime in the future is fine.

    I’m almost 30, but I don’t plan on buying a house anytime soon. I’ve lived in three different states, the UK, and now I live in Norway. I don’t know where I’ll be 5 years from now, and renting makes it much easier for me to head somewhere else if the right opportunity comes along. Will I settle down eventually? Sure. But why be in such a hurry?

  23. Applekid ┬──┬ ノ( ゜-゜ノ) says:

    Thanks to The Whitest Kids You Know, I could not read this article without thinking of Abe Lincoln shouting “NOW YOU F—-ED UP!” in my ear, because, quite frankly, if I didn’t have such a well paying job, I would be f—ed over 7 ways from Sunday.

  24. MitchV says:

    They missed a huge one.

    #1 – Don’t rack up huge student loans when you go to school.

    There are waaaaaaaaaaaaaay too many people that attend schools they cannot afford and/or their occupation afterwards will not be able to pay off the debt.

    The school you graduate from may have an impact on your first job… after that, it’s just pedigree. Education is important and should be a priority, but it is not a good enough reason to sink yourself deep in debt before you are 30. Many folks end up graduating and learn that they were living a better lifestyle while they were still in school.

    • MoreFunThanToast says:

      @MitchV: I attended public school and with half of my tuition covered by financial aid, I am still about $20k in debt. Unless you have parents who could afford to pay the tuition, most of us pretty much had to take out loans. Even a 40/hr week job usually wouldnt be able to pay for both fees for school and living.

    • Etoiles says:

      @MitchV: Tuition + room and board + mandatory fees at my state university, at in-state resident rates, went from $17,000 my first year to $23,000 by my fourth.

      So that’s $80 grand for state school. (Although admittedly I lived off-campus my senior year and used my $7/hr 30h/week job to pay rent and groceries,so my senior year cost less than my freshman year.)

      Mmm-hmm.

      Also I’ve been out of school for over five years. It’s worse now.

    • battra92 says:

      @MitchV: I went to college for 7 years at a public college. Granted, I screwed up (staying too long in a worthless major before discovering what I want) but now I am a year out and because of those extra years (despite working two jobs) I am in debt about $18K. Now that would be all paid off if I hadn’t done something stupid like bought a brand new car but oh well, I have 9+ more years on the car which will be paid off next month and in a year I’ll have my student loan done with.

      So moving out of my parents house had to wait 2 years from graduation because of that debt. Not fun.

    • bobloblawsblog says:

      @MitchV: i hear that. At 17, i had no concept of how much debt i was taking on. Great, you tell me $60k, but to a 17 y/o… you may as well have said a million bucks. all i knew was that i made $7/hr and i couldnt afford sh*t anyway.

  25. ZoeSchizzel says:

    7. Use birth control so that you don’t potentially end up with unplanned and unwanted baby. Talk about fucking up your finances. That will do it big time.

    8. Don’t skip the health insurance. All it takes is one minor car accident to rack up some hefty medical bills.

    9. Make friends with skilled laborers, and be willing to exchange services – exchange computer help for pressure washing or a flooring job or haircuts.

    10. Don’t get in trouble with the law. A DUI is expensive and embarrassing, and completely avoidable.

    • pecan 3.14159265 says:

      @ZoeSchizzel: I know someone who doesn’t “get” why she needs health insurance. Despite everyone around her telling her exactly why she needs it, she just won’t do it. Night the brightest bulb in the box.

      Another reason to have friends who are skilled laborers is that these friends can help you figure out which companies are good to do business with if you do decide to hire a company to fix something or install something. And they serve as a resource, even if they can’t do the project themselves.

  26. Haltingpoint says:

    Agree with all the comments on not donating money to charity. I’m sorry, but in this economy EVERYBODY needs to be saving every penny they can. Let the folks who don’t worry about money donate.

    If you do feel like being generous, at least donate furniture or clothing that you no longer need and don’t want to go through the hassle of selling. Then you at least get a tax write off.

    • pecan 3.14159265 says:

      @Haltingpoint: I thought you got a tax write off for monetary charity donations too. No?

      • Haltingpoint says:

        @IHaveAFreezeRay: Of course you get a write off for monetary charity donations, however you are still giving away cash that you could use whereas donating old furniture/clothing that you no longer have a use for reclaiming value from something you no longer received value from so in essence, you could come out further ahead by doing the latter.

  27. theblackdog says:

    I already fork over 15% of my gross pay to my retirement and my employer contributes, so I should be well taken care of by the time I reach retirement age.

  28. ZoeSchizzel says:

    I forgot to add…

    11. Donate your TIME to a charity/cause you feel passionate about. One of the best ways to save money is to participate in activities that don’t cost money, or that don’t put you in a position to purchase things while you’re in search of entertainment (like browsing the mall for something to do). If you’re connected to a community organization, you have a productive way to spend some down time among people who are like-minded. You might also make some great friends and business connections too. When my kids were small, I started a children’s volunteer group at our local animal shelter. I got to spend great, FUN quality time with my kids while we bathed puppies, bottle-fed kittens, washed food dishes and did laundry. We also participated in local animal-related events, held dog washes, and sold bandanas and other pet related items to raise money for the shelter. Didn’t cost a dime…just time.

  29. GuinevereRucker says:

    For all those bashing giving as healthy, I am here to bash you.

    My wife and I deal with our money like so:

    Base income -> Tax -> Give 15% -> Save 15% -> Pay Bills -> Spend on ourselves

    Really, I welcome you all telling me I’m stupid with my money by giving it away. That I’ll be more financially secure by keeping 15% more of my income. I’d be glad to tell you how my wife and I live on less than 40k a year combined with no debt and lots of money to spare!

    My experience over the past few years tells me I’m better off as a result of giving, and I totally agree with the advice that whoever gives his money away appreciates and values what he has left over more!

    That said, I hate taxes :) That’s not charity, that’s extortion.

  30. smurph0404 says:

    #6 is HUGE! You are a product of your environment and if you surround yourself with bad decision makers you are shooting yourself in the foot. My dad is an attorney and even though I’ve never gone to court for anything there are still little nuggets of knowledge to be gained from people who belong to any difficult profession. I would add IT/Computer person and Mechanic/Car Person to that list as well.

  31. bbagdan says:

    I would say definitely DO NOT give anything to charity. You barely get any tax write off for that. Do it when you are in a high tax bracket and have already maxed out your 401k/rrsp.

    Debt is a brilliant tool that allows you to leverage someone else’s money for your own improvement. Just don’t use it for buying crap. Use it for education, work clothes, etc.

    DO NOT buy a house if you’re under 30, unless you can put a 20%+ down payment. Jobs, location, and lifestyles are too tumuluous under 30. Tie yourself to a huge investment and you may end up working a crap job for the rest of your life for fear of quitting.

    Know an insurance agent? Why, what is all this stuff you need to insure? A tax preparer? I guess, if you don’t know how to read and/or do basic math.

    Have fun in your 20′s and travel and buy cool stuff. You’re only young once. Just don’t be a total idiot with your money.

  32. dakotad555 says:

    On the much reviled suggestion #4, give to charity:

    I think that giving to charity is an excellent way of establishing a mindset that doesn’t include spending 100% of your income every month. If you’re giving to charity on a regular basis, you’re proving you have ability to ‘live beneath your means.’ That’s a pretty important financial skill. You can immediately STOP giving to a charity if push comes to shove, but you cannot instantly increase your income if something shifts in your monthly expenses.

    I also think it demonstrates a level of maturity to contribute to the greater good. Those complaining that charities spend 50% on overhead haven’t really looked into many charities. Do some micro loans for Mozambique where 100% of what you give impacts the life of another person.

    There is also a rule that I believe in, and that is that you reap what you sow. Call it Karma, or what-ever you want, but if you give to those less fortunate, you’ll get a benefit from it. I’m not saying “give because you get back,” I’m saying give because you might someday need to be given to.

    Any yes, the cake is a lie. (Portal anyone?)

  33. kolacek says:

    This is such a good reference guide. Good job.

    I have to say, though…IMHO, one of the things that is going to make following #1 near-impossible for the under-30 crowd is a false sense of entitlement to the good life [whatever that is] and a lack of experience in finance that many creditors have counted on as a life-long income strategy.

    I can’t seem to impress upon any of my younger friends that ridiculous prices are not a symbol of living well. It’s impossible. I’ve had discussions over where to eat dinner turn into insult-laden smack-downs because I refuse to spend more than $10 per person when eating out.

    I think credit card debt will be seen years from now as a national crisis on par with WWII. This is some scary shit we’re living through and hiding in foxholes isn’t gonna cut it.

  34. explosivo2k2 says:

    Here’s what not to do:

    I just turned 26. I just got married last year. We spent ~$20,000 we didn’t have on a large 200 person wedding. We purchased a house a few months before the wedding. My dad hooked us up with about $6000 before & after the wedding. My lovely wife had about $5000 in credit card debt before we married (I knew this). I had about $1000. I paid off my 2003 Dodge Stratus this year, her 2001 Pontiac Sunfire was paid off already. And the wife wants to try to have kids soon. I’m rambling.

    Bottom line: I’m 26, wife is 27, we have $20,000 in debt and we’re just barely paying our mortgage & bills. One of us is going to get a 2nd job soon.

    Don’t go into debt for your wedding. It’s stupid.

  35. kaylabear says:

    I agree with everyone else here who thinks giving to charity isn’t realistic for people just starting out. I think giving is good and should be done but how can you possibly help other people out when your own situation is precarious?

    Granted, living conditions are different all around the world, and America definitely has it better than most, but relatively speaking, if you lived and worked in America all your life, you’ll know that cost of living is always increasing, especially in the major cities. The dollar doesn’t go very far anymore, even in America, and while a few dollars a month would be of great help to someone living in, say, a Third World country, donating that money doesn’t lessen the fact that you still have to pay the extremely high costs of such basics as housing (rent, mortgage, etc.), utilities, transportation, food, health insurance, etc. In the end, you just end up resenting others.

    For people like Bill Gates, I think it’s great that they’re giving their money away – they should. But when you make close to poverty wages, especially in the major metropolitan areas, like me (I live in the SF East Bay but I work in SF – ironically, I can’t afford to live in SF), every little bit helps and now is just not the time to be a philanthropist.

    As for the advice about saving instead of spending in your 20s: BULLSHIT. I don’t want to wait until I have crippling arthritis and the walking speed of a banana slug to explore the great cities of Europe or see the famous veldts of Africa – I want to do it while I’m young and vibrant and energized. Sure, you should save, set aside a few dollars each month, but I really don’t want to wait until I’m at the edge of life, as I refer to it, to live. It’s just a question of doing it reasonably and responsibly, but shit to the idea of socking a sizable portion of your money away in your 20s. Remember: you get older every day that goes by and you’ll never be able to get that back once it’s gone – you can make money at any age.

  36. Decaye says:

    I was preparing for my future (19 now), but now I pretty much have to start over. Had a pretty significant amount of money in a bunch of fairly aggressive funds. Here’s to hoping the stock market recovers a bit before the country collapses, so I can at least get something out of it.

  37. lukobe says:

    Good tips, but people need to be learning this sort of stuff earlier, like in college or, even better, in high and middle school. There needs to be a serious initiative to improve financial education in this country, as I argue at Crosscut.com: [www.crosscut.com]

  38. BytheSea says:

    If you have an employer matching 401(k), put in the maximum every year, if you can. If you don’t have an employee matching 401(k), open a Roth IRA and contriubte the maximum every year.

    Build up good credit.

    Consolodate your student loans at a low rate and start paying them off.

    • scarletwine says:

      @BytheSea: I am 27 years old and a PhD student. I have wracked up tens of thousands of dollars in school loans. I live off my fellowship which means all of my income goes to rent, (in LA which is atrocious), bills, food, and the occasional night out. I haven’t a penny in savings and the thought of saving for SIX MONTHS worth of expenses is utterly laughable.

      Despite the housing situation, the average home price in LA County is still in the 400,000′s. Buying will not be happening for me anytime soon.

      The one thing I’ve managed is to contribute as much as I can afford to my 403B and my credit card debt is very low.

      So am I effing up? I’d like to think not. Houses, lawyers, and charities aren’t right for everyone.

  39. scarletwine says:

    [edit: The former comment was not actually in reply to by the sea.]

  40. adamondi says:

    I always like seeing one of my pictures used for a post. This was a way to save money, too. My wife made this cake for me for a birthday a couple of years ago rather than buying one from a store. She is a good cake decorator, and her mom could easily be professional if she wanted to.