This article is part of the Money Matters for All Ages group writing project being conducted by the M-Network and other blogging friends (that’s me!). See the bottom of this article for the full list of participants and links to their articles. Please check back daily as I will update the links as new articles are posted! Also, if you are blogger and would like to join into the discussion, feel free!

I am careening out of my twenties quickly. It’s been a wild ride financially. I’ve been in debt up to my eyeballs in my early 20s. I’ve (with hubby of course) made some nice amounts of money on real estate. I’m the first to admit my 20s haven’t been typical. By 20, I owned property. By 28, bought and sold 3 properties and had 2 kids, while living in 3 different states. I’ve been a working mom while hubby was a stay-at-home dad. I’m currently a stay-at-home mom while he works and we renovate our 60s cottage. I’ve jumped into stock market investing. I’ve made some huge mistakes and I think I’ve also made some very sound financial decisions throughout my twenties. Here is a list of things that I either wish I’d known sooner or learned and used to help me navigate my way through my twenties financially. Essentially, a list of things I want to teach my children when they arrive at this exciting decade.

The number one thing I wish I’d known then that I know now is how horrific being in credit card debt is. If there is ANYTHING that I teach my kids and I hope they listen to it is stay out of credit card debt. Early twenties is a tough time. You’re young, not making much money usually and still need to survive. And with all the stuff out there that looks so wonderful to have, it’s hard to say no and to live within your means. This is the best age to be frugal because living frugally early on is the foundation for the rest of your life and will give you the opportunity to live well while also living below your means.

It seems to me that today there are so many people that want the American Dream at age 25. Big house, nice cars, cute fence. I agree that it’s enticing. But a generation ago, people didn’t have all of that in their 20s. They worked a lifetime to have that by retirement. And somewhere along the line that got lost. People started taking on more than they needed just to keep up. And I hope to teach my children that a lifetime of hard work and savings will get them to that dream but they don’t have to pretend to have it early on when they can’t really afford it. And it will be that much more fulfilling to live that dream when they can afford it.

Some other tips and lessons I hope to pass along related to this concept are

  • Understand and love compounding. Everything you do to sacrifice to save and invest for the future will be fun and satisfying once you love compounding. What you think you need now probably isn’t worth what you can have later if you use restraint.
  • Start an IRA if you haven’t yet and contribute the maximum annually
  • Learn to budget
  • Love living below your means. When you do, it will be fun investing and watching compounding work for you.
  • Borrow only for the absolute necessities of life and be sure to use those borrowed funds to buy, your home or whatever, at low enough a price to have a margin of safety.
  • Borrowers have compounding working against them. Lenders (investors) have compounding working for them. It is like the difference between swimming with an anchor on your back (borrowing) or a float cushion under you (lending/investing).

Some tips for investing in the stock market

  • When you start investing in stocks and bonds use no-load index mutual funds.
  • Invest when everyone agrees an asset or asset class is doomed and sell when everyone agrees it can only go up.
  • Stick to your guns. If you decided it was a good investment and you waited and bought it right then give it plenty of time. Do not be looking to jump in and out of investments!

Above all else though, don’t forget to have fun. You’re only young once!
The rest of this Group Writing Project can be found at the following links:

January 15 – Introduction at My Dollar Plan
January 16 – Preschoolers at I’ve Paid for This Twice Already
January 17 – Personal Finance for Children and Pre-Teens at Being Frugal
January 18 – Teenagers at Gather Little by Little AND Money Advice to My Teenage Son at DebtFREE-Revolution
January 19 – College Age at Mrs. Micah
January 20 – The Twenties at HERE and Money Tips for the 20 Something Crowd at Cash Money Life
January 21 – 30s – The Chaotic Decade at Moolanomy and Money in Your Thirties at My Two Dollars
January 22 – The Forty Year Old’s Wake-Up Call at Credit Withdrawal
January 23 – You’re in Your 50s Wake Up and Start Saving at Millionaire Money Habits and Retirement Objectives in Your 50s at Credit Withdrawal
January 24 – The 60s and Beyond at Chance Favors and In Your 60s – Use Your Financial Freedom Wisely at Rocket Finance
January 25 – Retirement at Quest For Four Pillars and Retirement in the UK at Plonkee Money
January 26 – Wrap up and highlights at My Dollar Plan