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Money Tips for 20-Somethings: 24 Ways to Get Smart About Your Finances


Post-college finances can be tough to manage. Here are two dozen pro-grade tips to help you feel less anxious about money.

20. Keep an Emergency Fund

According to the Florida-based consumer financial services company Bankrate, 28% of Americans do not have any emergency savings. That means nearly one-third of Americans do not have a plan ready in the case of any kind of unexpected cost -- say your car breaks down, or you need to book a last-minute flight, or for some reason your pay check doesn't come through and rent is due the next day.

If you don't yet have any kind of emergency fund, Dana Twight, of Twight Financial Education,commends building up the fund by weekly or monthly deposits into a savings account. And as for where that account should be? She said, "Identify a 'bank of inconvenience' and sign up for a direct deposit via your employer." Basically, find a new bank, open a savings account that you mentally label "for emergencies only," and make arrangements with your employer for regular direct deposits into that new fund.

21. "Don't Wish It Were Easier. Wish You Were Better."

This is more of an attitude and lifestyle choice than a concrete step, but it can prove extremely helpful: Sean Nisil, the Sand Diego-based financial planner, thinks that all 20-somethings should memorize this quote. As he told me, "Twenty-somethings need to learn the joy of delayed gratification. Building small, positive habits with your money now will snowball into financial freedom later in life."

The point is, don't lament how difficult it is to make a decent living and save money (because it is). Instead, rise to the challenge: Be a better saver, educate yourself, get a better job, and be proactive about your future and about becoming financially secure.

22. Donate Time, Not Money

Philanthropy isn't just for rich people: The best investment young people can give back to their community and society is their time. As personal finance author Gene Natali tells me, "Time is often more valuable than money, and there are countless organizations that would gladly have cash-strapped 20-somethings volunteer their time. As one example, I've been coaching Special Olympics athletes for six years now. It's a terrific organization, and all they look for from the coaches is our time."

If you are interested in giving back, consider large organizations like the Special Olympics, Big Brothers Big Sisters, and the American Red Cross, which are almost always in need of help, as well as smaller organizations in your neighborhood. By giving your time instead of money, you'll be saving more and making a direct, personal impact. It's a win-win.

23. Create a Dream Board

It is obviously important to have specific goals, but perhaps even more important is to have a way to keep them vital and alive for you, and to constantly remind yourself where you want to be.

Ozeme Jeanna Bonnette of the Fresno, California-based Tri-Quest Investment Advisors recommends a dream board. "Even though we are in a digital age, it's nice, and motivating, to see pictures of your dreams on a mirror, the refrigerator, or anywhere else that you frequent. This will make your dreams feel more realistic, and encourage you along your journey," she explained.

As Yogi Berra once said, "If you don't know where you are going, you might not get there."

24. Don't Put Money Ahead of Life

It is important to know your own financial goals and to write those goals down, but remember that your goals shouldn't only focus on how much money you want to earn in your lifetime. Rather, as National Financial Education Center's Todd Christensen explains to me, "It involves writing down activities and items that are truly important to you and that you need money for in the future. Generally, we will find life most satisfying when we invest time in the relationships with people in our lives, rather than spending money on stuff."

In other words, rather than buying those shoes you want but don't need, have dinner with an old friend who's in town. It's the smart thing to do, both for your finances and your happiness.

For further reading, here is our list of recommended finance blogs for 20-somethings:

20 Something Finance

YoPro Wealth

Debt Free in Three

Sweating The Big Stuff

No Dollar Left Behind

Follow me on Twitter: @JoshWolonick and @Minyanville

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