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Empowering your money

5 money lessons to learn in your 20s

Ruby Joyce is a writer for BUILT BY GIRLS prepares the next generation of female and non-binary leaders to step into their power and break into their careers. WAVE is the backbone of BUILT BY GIRLS: it’s a 1:1 matching program that connects high school and college students with top tech professionals across the country. For more information and to sign up check out

As an independent young person learning the ins and outs of adulting, you can achieve your financial goals by learning how to use your money wisely.

Whether it's saving, setting goals for yourself, or simply taking care of your health, there are several ways to be smart about your money.

To set yourself up for a secure financial future, start by following these five tips:

(Photo: Getty)
(Photo: Getty)

1. Save, save, save

Your savings are for rainy days, emergencies, and your future retirement. A lot of young adults usually make the mistake of neglecting their retirement fund, since you’re just at the beginning of your adult life and your career. Retirement, after all, is decades away.

But time is of the essence when it comes to your savings. The earlier you save, the more your money will earn through compound interest. This way, you can enjoy your money during the peak of your career and also way after you stop working.

2. Impulse shopping is the enemy

The average American spends around $150-180 on impulse shopping every single month. For many, impulse shopping is a form of retail therapy that helps them feel better during stressful situations.

(Photo: Getty)
(Photo: Getty)

We're not saying that you don't deserve to treat yourself, but it's important to remember that you don’t need to spend hundreds of dollars in one go to reward yourself. Even if that item is on sale, you should still ask yourself if you need it or if you’re just buying on impulse. Be mindful of your stress levels and assess your needs with a level head before making large purchases to avoid unnecessary impulse shopping.

3. Loans aren't always bad

Loans are only intimidating if you’re not forward-thinking. Getting in debt because of impulsive purchases and excessive getaways that only give you temporary benefits will surely bring you trouble. But there are times when loans can be a good thing.

For instance, student loans can help you finish your degree, and mortgages allow you to live in the comforts of your own home instead of paying rent every single month. Meanwhile, personal loans can be useful for home improvement projects and even consolidating other debt. The former can pay off by increasing your home value and standard of living for you and your family, while the latter can let you refinance loans with a lower interest rate.

(Photo: Getty)
(Photo: Getty)

The key here is to choose loans that have long-term value so that you can enjoy the returns on your investment for your home, your education, or your business.

4. The value of clear financial goals

Your financial goals will give you more direction when it comes to money. Remember that your 20s is the beginning of your adult life, so your spending habits today will impact your financial security in the future. Maybe you're looking to buy your first home in a few years, or move to a new city soon — these all have implications on how much money you'll need.

Setting clear financial goals will give you reasons to budget properly and to spend your money wisely, instead of doing whatever you want in the spur of the moment. When identifying your long-term goals, assess what your current needs are so you can set your priorities. Afterward, create a budget that matches these goals and be sure to stick to it, whether it's through personal finance apps like Mint and PocketGuard or a small notebook of expenses.

(Photo: Getty)
(Photo: Getty)

5. Health is wealth

The COVID-19 pandemic has made us realize that our health is more important than ever before. One of the most important money lessons you need to learn while you’re still young is that you need to invest in your health.

Today, almost half of Americans fear unexpected medical bills, and 44% even said that they would not be able to afford a $1,000 medical bill. You want to be able to receive quality medical treatment, which is why you need to save up for medical emergencies. Build an emergency fund in high-yield savings accounts to help you cover any surprise medical bills, and consider getting a health insurance plan, as well.

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