Your 20s, money, and dying broke

Always hope for the best in life, but plan financially for the absolutely shittiest day of your life

In your 20s, there is always the tomorrow that gets in the way of making good money decisions now in your life. Why save money today when you can put it off until you are older, somewhere out there on the other side of 30?

Besides, what about all my debt you say? How can I save when I can barely live?

When you are in your 20s, it is not what you save, it is developing the discipline to save and live within your own life that is important. Your debt is real, your apartment is expensive, but if you don’t start now, even saving $50 per month, the mindset to become that financially independent person almost never develops later. You become financially disciplined when you are in your 20s, or you most likely will be playing catch up for life.

The old Money Rule of 20/50/30 doesn’t really work today if you live in a major metro area. This rule states you save 20 percent of every paycheck check first, before any other bill is paid or even considered. This 20 percent savings first part of the formula is your goal for life, as a minimum. You may not start saving at 20 percent, but you need to end up there soon, before you are in your 30s, or you will find yourself struggling for money in the years you should be enjoying what you put away.

According to this old rule, you then spend 50 percent of your check on the necessities of life, such as rent, student loans, and whatever else it takes you to live each month. Eating out and drinking heavily nightly is not part of what it takes to live each month. This 50 percent is covering all your basic bills, so you do not have to live on the street or in your car and can make it to work without dressing like a homeless person.

Where this rule is dated is that it usually takes at least 60 percent of your check these days just to live. Debt is higher, rents are higher than when this rule was created, and just the cost of going to work is even higher.

Modified, the new Rule of Money would be 20/60/20. Twenty percent to savings, which stays the same, 60 percent for the cost of living each day, and the final 20 percent is all yours to spend, referred to as discretionary spending, as you see fit each month.

One of the big issues that destroys your ability to live within a check, and a lifestyle you can afford in your 20s, is that we are culturally taught we are only one big break from making the big money in life. This app will hit. This new start up is the one, but it will take a year. This new side hustle is going to set me up for life. And it might, but it might not.

Always hope for the best, but plan financially for the absolutely shittiest day of your life

We save today for the bad things that will find you. People lose jobs, get divorced, get sick, suffer with parents who need your help, and money, and a myriad of other things that set you on your ass when you least expect it. Save as this is all you will ever have, and if the biggest of breaks comes your way you have at least established the personal discipline you need to set yourself in motion for life.

In your 30s, you buy too much, too big, and too soon. Too big of a house, too much apartment, maybe even too many kids, too much stuff and almost always too much car.

Our 30s is where we usually earn our first real money, and it feels so good and spends so well. We have been broke for a decade, but now we have better money coming in, so we need to catch up on the life we haven’t yet lived.

Six destination weddings, three weekends skiing, that new dream car and all the new money you are making is spent, and what you haven’t even made yet is terrorizing you each month on your credit card statements.

And you still haven’t saved, and you still haven’t thought about a future yet to be paid for with the cash you make now. Perhaps one of the hardest things to understand in your 30s is that statistically, you will probably live until you are close to 100 years old.

There are experts on aging that even believe somewhere on this planet there is a person in their 30s who will be the first to live until 150. What this means for you is that you most likely will be retired and living off the money you save longer than you will be working for a living.

The Rule of Money has to be modified again for your 30s and should look like 25/50/25, where we increase our savings to 25 percent of each check, shift our necessities downward to 50 percent since we should be reducing debt by now, and spending that last 25 percent to enjoy our life.

Perhaps the biggest rule of life in your 30s to learn is to buy smaller, live smaller, have less stuff, and chase more life. In our 30s, we buy a house we can’t afford to leave even for the weekend, buy stuff that is dead two weeks later, and we melt down credit cards living a life we plan to pay for somewhere out there in the future. Do you really need a $300 pair of sunglasses, or would $300 look better in the bank? How often do the sunglasses win in your life as you live now?

If not 25 percent of your check, at least strive to save $400 per month minimum first and then blow the rest. Save $1000 per month if you are super cool and a highly intelligent human being smarter than your friends. And those kids that might have started early but are definitely in your life in your 30s, you will be paying for those kids forever…and I mean forever, so save a lot now.

In your 40s, your life should be coming together. You worked for decades being good at something, mastering a career unique to you, and now in your mid 40s it should pay.

Debt free is your goal in your mid 40s. Extra payments on the house, buy used cars, less stuff, see the world and save money. Saving $1000 per month is the minimum, but $4000 per month is better, or anywhere in between.

In your 50s is when reality hits. You either saved as described above, or you didn’t. You wake up at 58 years old with a few thousand dollars in the bank and you can’t catch up.
Saving is a “start young and keep going until you are old” deal.

No discipline, no money in your 50s and hello pushing carts at The Walmart until you die.
If you saved, then save more, because you will live to about 95 and will outlive most money.

If you are in your 60s, save more and give back. You made it this far, have money, now pay back the universe. Donate, volunteer and give a hand up to those behind you on the ladder.
You still have 30 years left to live; don’t blow it all yet, but see the world and live.

If you are 70, start a new career, spend some money tasting what life has to offer. If you were smart, you realized the workouts you did 10 years ago are why you can move now.
Others fade. You had a life of fitness and can still move, live, have sex and wake up smiling.
Stay good with your money, you have 20 years left or so.

If you are 80, do whatever the hell you want in life.

You earned the right.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store