Building Financial Success

Hello Darlings, Setting off on the right financial foot in your 20s is key to building future success. A tip that is easier said than done especially when young! It is never too late or too early to start which is why I asked Rebecca Olgeirson from ShopAtHome.com to put together 8 things that you can do in your 20s that will secure your finances. Here’s what she had to say!

Setting off on the Right Financial Foot

Full disclosure: My roaring 20s did a number on my credit score. A puny paycheck from an entry-level journalism job never stopped me from indulging in sushi, Gucci and shoe shopping.

Of course, getting debt-free was no picnic, so in an effort to spare my sisters this fate, here are eight great tips for 20-something ladies that will put you on solid financial footing. The good news? You can still buy those fabulous stilettos. Just use them to stand tall and take small steps to financial security. You’ll be sitting pretty in your 30s, 40s and beyond.

1. Make a budget — Know what you’re working with. Sit down with your laptop and look at your monthly bills for housing, utilities, transportation, food and insurance. These are your non-negotiables. The amount that’s left over? That’s your spending money: restaurants, shopping, cell phone, travel and entertainment. Allow some flow between the categories of spending money, but be honest about how much money there to play with. It’s easy with this worksheet.

2. Learn to cook — Eating out is expensive. Learn to cook simple foods for weeknights and save up for big nights on the town. Once you have a few recipes down, start checking out coupon sites like ShopAtHome.com for your staples and spend less at the grocery store.

3. Pay off credit card balances — If you can’t pay for it in cash, you can’t afford it. We know plastic is more convenient, but if you can’t trust yourself with a credit card, stay strictly debit. It’s shocking how fast credit card balances pile up.

4. Plan your binges — A life without shopping is not a life worth living. Become smart about your style. Instead of snapping up the latest trends on a whim, plan your big-ticket purchases. Save your pennies, scout for bargains and most importantly, buy quality. Not that I’m giving you permission to buy a trophy bag, but a classic Louis Vuitton will still look great in 15 years.

5. Make the right friends — You will build the strongest friendships of your life in your 20s. Don’t waste these years trying to impress the wrong girls. Find friends you can be honest with about your finances. If everyone is living within their means, it’s easier on the whole group. Better yet, find friends who’ll help you save money by tracking down the best happy hours, organizing clothing swaps, trolling vintage shops, strolling second-hand boutiques and other cheap endeavors.

6. Enroll in company retirement plans — Yes, your paycheck is small and this will take away from your monthly budget. But a little thing called compound interest makes the money you invest now very, very valuable come retirement. By taking advantage ofcompany savings plans like 401(k), you never see the money in your paycheck…and it helps your tax bill come April . Once you set up this feature, try to increase your contributions every time you get a raise. If you don’t see it you won’t spend it.

7. Build a buffer of “walking money.” — Having your own safety net of six to nine months of living expenses is imperative for independent women in their 20s. If you have money in the bank you’ll be able to walk away from a bad boss, a crazy roommate or rotten boyfriend with your head held high. It takes time to save this cash; include it in your budget and give yourself a year to accrue.

8. Choose a charity — It’s better to give than receive. And the goodness that comes from charitable giving can never start too soon. Find a nonprofit that excites you and start small. Today’s nonprofits are clamoring for young supporters and often offer events and parties geared to 20-somethings. The networking opportunities can be tremendous, but more importantly it connects you to the bigger world. After all, money isn’t everything.

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