Financial Planning, Millennials

5 Tips To Make The Best Of Your 20’s and 30’s

Wasting your 20’s and 30’s can mean different things to different people. Some may consider grinding on work and saving lots of money but missing out on life with your friends and family as wasting your 20’s and 30’s. Others might consider the exact opposite as wasting your 20’s and 30’s — not focusing on growing your skills, partying and traveling all the time, and not saving or investing any money. 

To make the best out of your 20’s and 30’s it’s important to find the balance between the two. Find ways to save money and grow as a person but also still find time to have fun and enjoy your life. You only get to live these years once.

Here are 6 tips for you to help ensure you don’t waste your 20’s and 30’s.  

1. Invest In Yourself and Your Skillset

In your 20’s and 30’s one of the best ways to spend your time and money is by investing in yourself. Improve yourself in every way you possibly can — from physical health, to mental health, to your skill set for jobs, etc. Focus on improving who you are as a person so you are better for your future. 

2. Save and Invest For The Future

Oftentimes, people in their 20’s and 30’s think they can just have fun and save later, but this does not take into consideration the effects of compound interest. Let’s look at 2 different people to help show what I mean. 

First, we have Xander. Xander was told about the power of compound interest and decided to start investing right when he got out of college into a ROTH IRA. Xander contributed the full $6,000 allowed for 10 years then never saved again. 

Then we have Chris. Chris in his 20’s and 30’s decided he needed to have the nicest apartment, a new car, and spent a lot of money on watches, clothes, and travelling…so he did not start investing until he was 40. At 40, he decided to start investing $6,000 a year into a ROTH IRA until he retired, so for a total of 25 years (retire at 65). 

Let’s look at how they both ended up when they retired (Age 65).

As you can see from the graph, based on an 8% return, at age 65, Xander has $1,101,794.25. His $60,000 grew to over $1.1 million because he invested early and his money got to sit in the market for so long! 

Now, Chris on the other hand put in a total of $150,000 over those 25 years and at age 65 ends up with $438,635.64 😳. Look at how massive of a difference that is. Just because Chris started so much later, he ended up with less than half of the amount that Xander did even though he put in almost $100,000 more. 

This is a great example of how time in the market is so much more important than almost anything else. Investing early is truly one of the best things you can do for yourself.  

3. Don’t Be Afraid To Take Risks

In your 20’s and 30’s you have the lowest expenses, the least amount of commitments, and most likely the least amount of people relying on you and your income. Knowing this, don’t just take jobs based on the income you can receive in the short term. Look to take jobs and opportunities that are going to groom you for the future and one’s that you will enjoy. 

You spend so much time working, don’t waste away that time doing something you are miserable doing. It doesn’t matter if you paid for a degree in that field, don’t trap yourself just because of that. Work is such a huge part of your life.  

4. Focus On Creating Good Habits

A lot of our success as people comes down to the habits we create for ourselves. Creating good habits around saving, paying off debt, working out, tracking spending, reading, learning, etc. are huge. It is way easier to start a good habit now than it will be to reverse and change bad habits you have created. 

Focus on doing this and good things will come for you. Saving $10 a month right now might not feel like much, but at least you are creating that habit of saving every month so once you make more money you are already used to saving part of your income. 

5. Find A Good Balance

Life is meant to be lived to the fullest, and I don’t think you can do that if you spend all of your time working. Find a balance between working and doing things you love. Find a balance between saving/investing and spending on things you truly value. 

Finding this balance can be hard, we are wired to always take things further and to the next extreme. Knowing this, put some parameters in place to help you find that balance. Ex: I won’t work past six 3 nights a week, and I won’t work on weekends. Another good example: I love to travel so I am going to set aside $2,500 a year to ensure I take a break and do something I love.

Setting up systems to help ensure you find this balance is key to your success.  

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