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Learn to always spend less than they make and save the rest.
50-30-20
Or as I taught the kids: 20-50-30
Pay yourself (save) 20%
Keep you living expenses to 50% of your income
Enjoy your life (especially while you are young!) with 30% for “wants”.
Budgeting. Unless they learn how to allocate their limited resources, it’s very difficult for them to control their hunger for spending in this YOLO world with credit cards.
Earn and save as much as you can, spend as little as necessary and stay invested in index funds.
Start a Roth IRA and max it out every year. Let compound interest do the rest for you. I followed my dad’s advice and started an IRA with Vanguard as soon as I began working, started a Roth when it became available, converted my regular IRA over to a Roth when the opportunity was offered to pay the taxes over several years and I’ve never looked back. I now have 7 figures going strong, spread over just five accounts, and not too many worries after nearly 40 years of letting it ride.
That’s the bottom line in terms of financial advice. The rest of the story is this: use your head and be sensible (if you’re going to college, get a degree worth having; mine was in engineering, and it’s served me well); be generous and support the causes you believe in along the way (and the people you meet who need help); never live extravagantly, and pay your bills on time because good credit is important (translation: I don’t drive a Porsche or live in a mansion, but I have a nice car and a comfortable home); and last but not least, tithe (because it’s all His anyway). 😉
Ben Franklin, advice that is enduring, secure and lifelong: “An investment in knowledge pays the best interest.”
Learn to live frugally, so you can invest. Invite friends to bring their own beer over for game night and serve homemade nachos instead of going out. Drive a compact car instead of a truck or SUV. Learn to cook. Tell your folks you’d really love a couple of nice bento boxes and an insulated lunch bag for your birthday, so you can take healthy lunches to work.
Two. 1) Invest in yourself. Your greatest asset when you are young is your human capital. 2) Save a little and save more each year. Saving is like a muscle, more you use it, the larger it becomes.
What did the participants on here do in their 20’s – follow the advice they give here? I lived hand-to-mouth in my early career so the thought of “saving” was not on my radar as much as “survival” was. No brand new fancy car, apartment, or travel was in the picture – it was about not running out of money before the next payday while paying rent, utilities, INSURANCE, and praying for a raise in pay without the car breaking down. Saving was just a concept to me at that time.
In this order: Carry no credit card debt. Max out the 401(k).
Get out of debt and ROTH it up!
Watch the expenses; Contribute to ROTH IRA (direct or backdoor); Max out workplace retirement, or save the same amount on your own if there isn’t a workplace plan; Not enough money? Assume that there was a big layoff in your company and you got away with a 25K pay-cut.
Save, save, save. Be frugal.
Agree with Dick on saving (till it hurts) and never carrying a CC balance. And would add—never pass up an employer match on retirement plan contributions—it’s free money.
Save first, don’t ever pay credit card interest, spend as you like with what’s left.