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Dear 20-Somethings, If You Don’t Know These 7 Important Things About Money and Finance, You’ll Regret It in 10 Years

Dear 20-Somethings, If You Don’t Know These 7 Important Things About Money and Finance, You’ll Regret It in 10 Years

It goes without saying that your 20s come with lots of new things: new friends, new experiences, new perspectives, and new legal allowances.

As it turns out, they’re also packed with defining moments that will shape the rest of your life. And while it’s usually very difficult for young people to think about things like planning for retirement and investing in life insurance, the truth is that those AARP discounts are closer than you might think. So if you can learn these important things about money and finance now, in the future you’ll be happy that you did, and probably a lot richer too.

1. Pay Yourself First

“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett

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    While the concept of saving may be a familiar one, paying yourself first is often misunderstood. I didn’t understand the idea until I was well beyond my 20s, but I wish I had understood it sooner.

    Paying yourself first means taking a portion of your earnings and putting it into a savings account or investment that can then work to earn you more money, all while you sleep.

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    The reason why this is so important is because when you’re saving money it grows in relation to the interest it accrues, so the more money you have to save and the longer you’re saving, the more you can take advantage of this extra “free” money.

    Alternatively, by not saving you’re also losing the money that could be gained in interest. That’s why it pays to learn how to pay yourself first.

    2. Learn how to Leverage the Power of Compound Interest

    “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” – Albert Einstein

    In his book

    The Slight Edge, Jeff Olson explains the power of compounding with a penny. A penny doubled each day for thirty-one days is greater than one million dollars today, he explains, and actually adds up to $10,737,418.24!compounding
      Photo credit Cviko Vidakovic

      Twenty-somethings have the best opportunity to take advantage of compounding because of the magic of time and the power that compounding gains as it grows. Unfortunately, many 20-somethings ignore this wealth-making practice and lose valuable opportunity in the process.

      3. Grow Your Financial Education

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        Becoming financially literate is not rocket science, though it can seem like it — especially when the majority of us are not taught financial literacy in school. But just like a higher academic education helps you advance in your career, higher financial education helps you advance in life and in what you can do. Thankfully, there’s no better time than your 20s to start the learning curve with any number of great resources.

        4. Know Your Credit Score and Keep it Up

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          In the September 2014 issue of Success Magazine, Suze Orman, the money guru herself, says that understanding your credit is key to financial health. “A FICO score will determine if a landlord will rent to you. It may determine if an employer will hire you. It determines if a telephone company will give you a phone, and it even determines what your car insurance premium happens to be.”

          As credit scores go, anything below 500 is a red flag and, just like your grades in school, it’s a lot easier to slide down than it is to bring back up, so pay attention. For additional queries and your free credit score, use CreditKarma, Credit.com, or Bankrate.

          5. Live Within Your Means

          “Do today what others won’t, so tomorrow you can do what others can’t.” – Dave Ramsey

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            In theory, if you have an income that can pay for your basic needs, you can eventually amass at least a small fortune by paying yourself first, using the power of compounding, making smart investments, and living within your means. However, most 20 somethings are still honing these practices. Not surprisingly, this is also the time when many people begin using credit cards to pay for things not necessarily within their budgets.

            Living within your means may look like skipping the movies on the weekends, trading your daily Starbucks for a homemade cup of coffee, or forfeiting that shopping spree in favor of recycling your wardrobe for a few seasons. However, when you practice this without reliance on debt, you give yourself a better chance to build a strong financial base. You might not think so now, but if you don’t put down that iced latte, you may be kicking yourself in the future.

            6. Learn to Use Discipline to Manage Income and Expenses

            “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” – Jim Rohn

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              There’s a great book that every 20 something should read called The Richest Man in Babylon. Trust me, if I had read this book in my 20s, I’m sure I’d be a millionaire by now!

              Through a series of parables the author, George Clason, relates the common experiences of poor money managers and outlines disciplines that lead to lifelong riches and wealth.

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              So imperative to financial health are the disciplines of managing income and expenses that these lessons serve as the foundation of the entire book. Unsurprisingly, failure to have a financial plan with these in mind is the number one regret of people when they reach retirement. Luckily for you if you’re in your 20s, it doesn’t have to be yours.

              7. Learn to Manage Your Emotions Around Money

              “In the world of money and investing, you must learn to control your emotions. High emotions equal low intelligence.” – Robert Kiyosaki

              There’s no denying that having money (or not having it) comes with a lot of emotion. When we have it we’re happy (and often irrational), and when we don’t we’re sad. With each emotion come behaviors that can make or break our financial stability for the future. Many a divorce, bankruptcy, and heart attack have been attributed to the stress that people feel around money that could have easily been avoided.

              Learning to manage your emotions with money is not only a good idea, it’s the thing that will help you to successfully navigate your way through the thousands of financial decisions you’ll need to make throughout your life, so it stands to reason that the better you can do this, the more money you’ll keep.

              While it may be easier said than done, there are always resources that can help you identify your level of emotional intelligence around money and work to improve it at the same time.

              Your twenties are a mixed bag full of fun experiences and new opportunities for growth. But if you can find a way to incorporate the seven practices above, you’ll not only thank yourself later, but even be able to afford to buy yourself an expensive treat!

              Noize Photography via photopin cc

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              Published on January 17, 2020

              How to Eat Healthy on a Budget (The Definitive Guide)

              How to Eat Healthy on a Budget (The Definitive Guide)

              Have you ever looked at health gurus and wondered how on earth they can afford all that health food? Or maybe you’ve tried multiple times to start eating healthy only to find the $600 monthly budget overwhelming?

              If you’re anything like me, you know exactly what I’m talking about! I absolutely understand the sinking feeling of looking back over a grocery budget and finding you went way over what you intended. And besides that, it can be hard to justify buying a tiny $5 bag of carrot chips while a $1 mound of potato chips is sitting right next door.

              My husband and I recently ran into that struggle. We got married this past year and soon found ourselves trying to balance 12 hour work-days with keeping our relationship strong and trying to keep our personal businesses afloat. Granted, our budget was the one thing that took a hit! After we started tracking our spending, we were shocked to see we were spending over $1000 a month just on food! A little planning cleared that right up.

              So, how to eat healthy on a budget?

              Here’re the top tips I learned that helped us shave over $600 monthly off of our food budget so we could reinvest that in the areas that really mattered to us![1]

              1. Meal Plan

              You’ve probably heard the saying “Fail to Plan, Plan to Fail” right? Well, this saying couldn’t be any more true than in the area of healthy budgeting! The fact is, most healthy foods don’t actually cost that much… the pre-made time saving ones do!

              If you go about creating a healthy meal plan within your budget, you could easily cut costs down to around the same price you are paying for junk food.

              Meal planning is as simple as working in foods you already have in your fridge/freezer, adding in several meals with simple ingredients and seasonal veggies, and breaking it down into a shopping list.

              Often, finding a few meals to make in big batches will save you the most money in the long run, which leads me to my next point.

              2. Cook in Bulk

              Not only will cooking in bulk save you a whole lot of time, it will save you a whole lot of money too! Believe it or not, if you find meals to make with similar ingredients, you can easily save more money than when you were eating unhealthy.

              Don’t believe me? Just look at a $4 frozen pasta dinner. Now, sub that with a veggie pasta dinner. 5 zuchinni ($3), Pasta sauce ($2.50), and chicken ($5) could last you a full 5 meals which adds up to a whopping total of just over $1 per meal!

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              That’s not even digging in to all the money you will save from fast-food. Trust me, a little $10 spent here and there add up! You’ll be saving a whopping amount from all the meal prep you will do!

              3. Cook all Your Meals in One Day

              The science behind this is 2-fold.

              Number one, if you have lots of meals to grab and go, you will be far less likely to binge on pricier food when you get hungry. Let’s be real, you’re not going to spend 1 hour cooking when hub-n’-grub is at your bekon-call!

              Number 2, meal prepping ahead of time will help you stick to your meal plan better when you’re not in the mood. Let’s face it, we’re all going to have days when protein and veggies doesn’t exactly sound appealing. But, if you have a full meal that’s quick to grab in the fridge, it will be easier for you to fill up on the good stuff rather than spending money on what you don’t really need.

              4. Cut Back on Snacks and Specialty Items

              I can almost hear you from across the screen. “But, I thought snacks were good for me!” Here’s the deal: Snacks are expensive! And healthy snacks, oh my goodness, say goodbye to your paycheck!

              Look, I’m definitely not saying that healthy snacks are bad. Quite frankly, I would much rather you chow down on Halo Top than a triple-butterfinger-fudge sundae. It’s just that… healthy snacks are why eating healthy gets a bad rap for being expensive.

              Look at it this way: You could either buy a week’s worth of groceries full of chicken, fish, beans, veggies, and fruits for $30. Or, you can spend that $30 on six snacks that will leave you hungry for more.

              What’s more, the ingredients for gluten-free baked goods, sugar free substitutes, or protein powders alone will add up to you eating a full week’s budget in one sitting. By all means, if you want to work some yummy items into your budget, do it! But don’t confuse that extra monthly $300 of delicacies as a necessity. Your body and budget will thank you!

              5. Satisfy Yourself with Your Favorite Subs

              We all have an emotional tie to food. Maybe pasta reminds you of home! Or maybe a fresh-baked pizza is what gives you a feeling of comfort. Whatever you favorite food, find a way to work it into your budget in the best way.

              We’re only human, and depriving ourselves of what we love will never end well. More often than not actually, it ends in take-out or a pricey-premade substitute.

              Instead of finding yourself in this situation, find a way to make your favorite foods fit your budget. Zuchinni noodle pasta might just give you that feeling of home without breaking the bank. Or maybe you could google a healthy pizza alternative you would like that you could make at home. Often, something similar to your craving will be enough to give you a sense of satisfaction.

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              Or, just buy your cheat meal and save it for a special day. That’s okay too!

              6. Stick to the Cheaper Proteins

              Okay, I know we all love steak. Unfortunately, buying pre-cooked or expensive cuts of meat are one of the easiest ways to drain a budget.

              Instead of purchasing those, try buying frozen chicken or eggs. A 5 lb bag of frozen chicken can be as cheap as $5, and you can buy a whole weeks worth of eggs for just over $1. You could even try going vegetarian for a few meals if you really want to cut down on costs!

              7. Buy Frozen Fruits and Veggies

              I know, we all love our fresh fruits and veggies! However, sometimes frozen might be the way to go if you’re looking to cut costs!

              Fruits and veggies are easiest to ship when frozen, making them a much cheaper option. Contrary to popular belief, scientists have actually found that frozen might be better for you too![2]

              The reason is, frozen produce is picked at its prime and shipped immediately. Fresh fruit tends to be picked much earlier so it will ripen while being shipped. Not only does this make it less nutrient dense, but sometimes the fruits are actually pumped with artificial flavors to make up for the lack of real nutrients.

              While I’m all for fresh fruits and veggies, don’t feel guilty if you opt for frozen foods due to a budget.

              8. Bump up the Calories with Rice and Beans

              The problem some people find when trying to eat healthy is that it can be hard to get the amount of calories you need without relying on expensive “specialty” items. Instead of stocking up on pricey gluten-free breads and pasta, I say stick to simple rice and beans as the bulk of your meals.

              Brown Rice is very cheap and easy to use as a base for bowls and dishes. Likewise, beans can add a bit of fiber making you feel full and satisfied without having to spend a lot of money.

              If you are trying to cut on body fat, use extra veggies as the bulk of your meal and add in rice and beans as a filler.

              9. Try Acai Bowls

              Acai Bowls can be a really cheap and satisfying meal as long as you do it right.

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              You can find cheap fruits at most stores or just freeze your fresh fruits before it goes bad.

              Making your own granola can save you a lot of money as well. The total cost for this delicious meal should only add up to a few dollars compared to triple that price if you were to buy one pre-made.

              10. Make Your Own Meal Kits

              Do you like your meals freshly cooked? Sending meal kits to your doorstep is an easy way to drain your budget. Instead, try making your meal kit at home! Not only is it fun, you will easily get a delicious taste.

              Simply find a few simple meal cards or print some out and fill a ziplock with the ingredients for each specific day. Don’t know what recipe to make? Another option is to order one month of meal kits and recycle the recipe into ingredients for the upcoming months with ingredients you picked up from the store.

              11. Don’t Drink Your Calories

              A few dollars spent here and there can really add up! Just as with specialty items, healthy drinks can be a blackhole for you. An energy drink and kombucha and coffee each day could easily have you spending and extra $300 each month!

              I you really need a special drink fix, try making your favorites at home. Bring a coffee in, make kombucha, or even try making lemonade with stevia or a healthy soda. You’ll be surprised w hat a big difference such a small change can make on your budget!

              12. Buy Cheap Online

              Just like anything else, it pays to be prepared. Buying foods from online retailers can be a really affordable way to save money as long as you’re prepared.

              Plan ahead for those more expensive specialty items you can’t live without. It will save you tons of money compared to having to buy food from a specialty store.

              13. Don’t Fret about the Clean Fifteen

              One of the huge things that can mess with a person’s budget is eating organic. For the record, I am 110% all for eating organic whenever you can. However, for some people, it can be hard to make organic food fit into a budget.

              Instead of scratching healthy eating for a smaller budget, try to buy meat and the dirty dozen organic, and don’t go crazy about the rest. The clean fifteen are the fifteen safest foods to buy that aren’t organic! Meanwhile, the dirty dozen is the most worthwhile avoiding. According to Produce Retailer, these are the dirty dozens:[3]

              1. Strawberries
              2. Spinach
              3. Kale
              4. Nectarines
              5. Apples
              6. Grapes
              7. Peaches
              8. Cherries
              9. Pears
              10. Tomatoes
              11. Celery
              12. Potatoes

              14. Pay Attention to Storage

              Keeping the food you have is just as important as how much food is in the first place. Try to stay on top of how much produce you can actually use before it goes bad. It might not be a bad idea to pencil an extra shopping trip in the middle of the week to keep food fresh.

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              Investing in good food storage containers could go a long way in saving you in the long run as well.

              15. Freeze Food Before it Goes Bad

              Instead of getting mad at yourself at the end of the week for all the wilted produce you need to throw out, try freezing it before you get to that point.

              Most frozen veggies will taste delicious in stir fries and soups. You can freeze fruits to make sorbet or smoothies. Frozen greens can be chopped up and tossed into just about anything for a nutrient boost!

              16. Consider Ditching Most Supplements and Powders

              I have nothing against superfood powders and supplements. However, if your budget is tight, it can be hard to fit supplements and powders in.

              Instead of adding in powders, add extra nutrients to you food. Add lots of greens and veggies to all your meals to meet your nutrient needs. If you need a specific supplement, you can find great deals online as well!

              17. Use Budget App

              There are so many great apps you can download for free. One of my current favorite is HoneyDue because you can track your budget easily with your spouse. There are many options available, just find the one that you’re most likely to use. The ones that download your spendings automatically are often the easiest and will give you a more accurate number.

              My husband and I use the same app, but have a separate budget for each of our weekly food plan and for our additional snacks. Keeping things separate can often be helpful to know exactly where your money is going. Plus, it can help hold you accountable if you have a significant other you are sharing money with.

              18. Use What you Have

              Most people have unused protein powders lying around in their cabinets. Instead of letting that go to waste, work them into your meal plan. Protein powders can make amazing doughnuts, pastries, or pancakes!

              19. Enjoy the Process!

              Finding ways to enjoy your new lifestyle will be helpful in sticking to it long term. Find fun in seeing how much you can save each month. Make a competition with someone to see who can stick to the lowest budget and create something fun to do for the winner with some of the money saved! Blast some music in the kitchen while cooking your new recipes.

              Budgeting and health doesn’t have to be a drag. Make it fun and you’ll enjoy your new lifestyle long-term!

              Featured photo credit: kevin laminto via unsplash.com

              Reference

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