With college expenses, potentially low-paying first jobs, and trying to get a firm financial foothold, your 20s can be a challenge when it comes to money management.
But as you ease into your 30s and find yourself with more financial security,there are some struggles worth keeping in mind – even better, turn them into strategies for long-term financial health. Here are some tips on saving money by living like a college student, even if you framed that diploma over a decade ago:
Keep practicing couch-cushion spending: For many people, especially those in their 20s, there’s often a time when every penny counts (particularly if pizza is involved). Even though you don’t have to dig between couch cushions to come up with spare change now, keep that cash-strapped attitude as much as possible. Just because your income goes up, it doesn’t mean your spending should increase as well. You don’t need to skip all of life’s luxuries, but maintaining awareness about your expenses can help to keep budgets in check.
Set goals and timeframes: In your 20s, college created a large and workable graduation goal that you knew how to reach: study, test, pass, repeat. When those days stretch further behind you, it can be trickier to set goals and understand the steps needed to attain them. If possible, try to keep some of that college mindset and create big goals that feel like a graduation ceremony – like buying a house, paying off debt, or reaching a certain level in your 401(k). Then think about the short-term financial steps you need to reach that milestone. (See our financial goals blog for some great tips.)
Expand your “change jar”: If one of your first jobs involved tips, you know the value of a jar where you can empty your loose change every night and throw in some dollar bills, too. For many people, this kind of “emergency fund” usually added up to a tidy sum after only a few months. In your 30s, it’s time to take this strategy to a new level and create a more robust emergency fund that will help you weather any financial ups and downs in your monthly budget. Experts advise maintaining three to six months’ worth of living expenses in this kind of fund, so first figure out what that total might be, and then commit money toward this new “change jar.” For a full step-by-step guide to setting up an emergency fund, see “Ready for a rainy day: Create an emergency fund for unexpected expenses.”
Most likely, your 30s will bring some huge changes personally and professionally, but holding on to some of the valuable strategies from your 20s can set you up well for decades to come.
Learn more about effectively managing your finances by downloading our free budgeting and saving e-book.