Today’s post is a shout-out to my fellow millennials.  Your 20’s represent quite an interesting period financially.  On the one hand it’s a terrible time to save and invest as most of us are just starting out in our jobs and earning the smallest paychecks of our careers (hopefully).  Plus, many 20-somethings are so excited with finally making their own money and getting credit cards that they make some not-so-smart financial decisions and purchases.  On the other hand, it’s the perfect time to save and invest before other responsibilities like spouses and kids enter the picture.

I was checking my Vanguard account (please, did you have any doubts I was already contributing to my 401k) only to find they had some cool articles on fiscal responsibility and savings, which you can check out here.  One of the articles featured advice from founder of the website Money Under 30, and I recommend you all check it out.  Here are some key takeaways:

  • Continue to pay off debts, particularly high-interest credit card debt, but before you accelerate paying down your lower interest debt (i.e. student loan debt), save a cushion for 3-6 months of expenses in case of emergency (car breaks down, you lost your job, etc.)
  • Whenever you have new money available in your budget, whether you get a raise or pay off a loan, you should consider increasing your retirement contributions by the amount of your raise or the payment that just ended because you won’t miss it
  • Don’t rush into buying a home, particularly when you may be moving for a new job or significant other. Only buy if you are going to stay 5 or more years, otherwise you won’t recoup the cost of the house
  • As long as you can pay and use it responsibly get a credit card so you will build up your credit score in anticipation of a future loan.  The key is to always pay it off on time, otherwise you won’t be helping your credit score
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