NPR News, Classical and Music of the Delta
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Timely Tips For 20-Somethings

Youchao Wang

I am sometimes approached by young people, often recent college graduates, who want to know if I have any financial tips for someone their age.

If you’re a young college graduate and you’re already thinking about how to be financially responsible, congratulations on separating yourself from the crowd by doing two things most people your age often don’t: seek advice and think ahead.

I find many young adults are acutely aware of things they lack: experience, money and broad influence. What each of these aforementioned assets have in common is time – it usually takes time to accumulate experience, money or broad influence, though time is certainly no guarantee of any of them.

Take advantage of time. You’ve got lots of time to spend. You can either spend it to your advantage, or expend it, like so much fuel leaking out of a plane on a long flight.

How does one spend time wisely?

1. Begin your financial journey. Most people are on the path to nowhere, like the children of Israel, wandering in the desert. But if you want to get to the promised land, you’ve got to get moving. For now, you go to work because you have to. If you decided not to go to work for a few days, there’s a good chance you wouldn’t get paid anything. So we’ll call that “must work.”

The goal of financial independence is to make going to work optional. The idea is to move steadily towards the time when your money is earning your income. We could call that “money work.”

2. Pay the price of financial independence. So, what does it cost to one day become financially independent? The first cost is time.

The second cost is living below your means. It’s not enough to learn thrift. You’ve got to live it. Since most college students have been living very modestly, my admonition to them is, “Keep it up!”

If you can save 20% of your income and live on the rest, do it! You won’t regret money you save early. And of much greater importance are those habits of thrift you establish early. If you wait until your 40s or 50s to practice thrift – it’s much, much tougher and the results will never be the same.

3. Increase your value – keep growing. I hope that at least one thing you learned in college is how to learn. No matter how you do it –be a lifetime learner! As you learn and grow, your economic value only increases, because you have more to offer others.

4. Protect your most valuable asset. The most valuable economic asset you have is your ability to earn an income. Talk to an experienced, licensed insurance agent about how to protect that asset in case something happens to you. It’s just dumb not to.

The first three suggestions magnify the asset you’ve got in greater supply than anyone older than you – time. The fourth protects you in case that time is ever stolen from you.

Your twenties can be one of the best ten decades of your life. Enjoy them by using your time wisely.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
Related Content