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21 Ways To Be Wealthy In Your 20s

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21 Ways to be Wealthy in Your 20s

Are you ready to be wealthy in your 20’s? Well, you’ve come to the right place!

Before I jump into this topic, I want to start by saying I am not a personal finance expert by any means. I am an avid learner, and I love learning about money and wealth, especially how to become rich at a young age and save for retirement. I am not talking about getting rich quick schemes. I am talking about accumulating wealth early so you can achieve financial wellness early too!

I have read many books and blog articles and have spoken with many specialists about my finances to figure out the heck I should be doing with them in my journey to financial freedom. Today I want to share 21 of my favorite tips I’ve picked up while learning how to become rich in your 20s.

1. Understand What True Wealth Means

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Before you can be wealthy in your 20s, it is essential to comprehend the real definition of wealth and how much money is wealthy. Robert Kiyosaki, the author of Rich Dad Poor Dad, says:

The definition of wealth is the number of days you can survive without physically working (or anyone in your household physically working) and still maintain your standard of living.

Do the math to see how much money you spend in a month than how much money you have saved in your bank account. Don’t forget to include investing money you may have in stocks or a retirement account. If you are currently earning any money passively without having to work, add this too!  That is how much wealth you have.

2. Make Your Finances a Regular Priority

Once you understand what wealth is, next, you have to make your finances a priority. Make a point to think about your finances daily. Set up a time every week to evaluate your spending and take time every month to review your budget.

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Making your finances, a priority means setting time aside to monitor and analyze your spending regularly. As in any goal, to become wealthy in your 20s, it must be on your priority list.

3. Make Sure You Are Saving for the Long-Term

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Saving money should be a part of everyone’s financial plan. You should be saving and investing every month, and not just in one savings account. One should be set up for each of your long-term goals. 

These goals could be buying a house or a future investment. It’s good to save for the bigger expenses you plan on having in the future. Or to have money for the future you.

Building your wealth for the long term plays a significant role in being prosperous and, in my opinion, the best way to become rich. Saving in high-interest rate accounts allows you to get more compound interest over time.

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4. Make sure you are saving for the short term

You should also be saving for more short-term goals and emergencies, including replacing something in your home, buying a car, or even making a smaller investment. It is good to make sure you save between 10-20% of your total income each month.

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5. Spend Your Money on Things You Actually Value

What do you value most when it comes to spending?

Do you enjoy a night out on the town or name-brand food? Do you have to have the latest gadget, or would you rather make sure you are getting your nails and feet done? Want to travel or buy a boat?

Ask yourself these things, write them out, and stick to them. If you wish to take a trip to Belize next year, think about all the ways you can save more to get there. Buy generic food at the grocery store, skip going out to eat a few times a week, bring your lunch to work, etc. Once you decide on what you value, make a point to cut out the things you do not care for as much.

man holding the business section of the newspaper learning how to be wealthy in your 20s

6. Spend Less Than You Earn

Set your budget so that you are only spending a portion of what you make. That way, you can save 10-20% of your income I mentioned above. A good thing about doing this is that once you get used to living below your means, when you do make more money, like getting a new high-paying job,  you can continue the trend to spend below your means and save more money quickly.

This is probably one of the most important lessons when it comes to how to grow your wealth.  How much you make does not matter as much as long as you are living below your means.

7. Start a Side Hustle

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Saving is important, but you have to know how to make some extra money too–an essential step in building your wealth in your 20’s. I have talked about the benefits of side hustles before, but I want to say that no one gets rich from just saving. When you start your own business, it allows you to create something on your own and make it bigger or keep it as small as you’d like.

If you can turn it into multiple income streams that can automatically make you some money every month without working every time, that is even better. (Hello, passive income, anyone?) And having a side hustle that brings in money passively for you is a great way to increase your overall earning potential. I have a list of 17 different side-hustles you could start to replace your full-time income!

8. Pay Your Bills on Time

Paying your bills on time is crucial if you want to keep your credit score in check. Get into the habit of paying your bills on time and avoid not only the headache of debt collectors but save you tons in late fees. Following this is mandatory, not optional. 

9. Invest in Real Estate

I know everyone has their way of making income, but real estate is for everyone. Even Oprah invests in real estate in her spare time. There are just so many benefits of real estate investing, including the potential for passive income and being able to pay other people to do lots of hard stuff for you.

If you do not know anything about real estate investing, I suggest you read Rich Woman: A Book on Investing for Women, Take Charge Of Your Money, Take Charge Of Your Life by Kim Kiyosaki. She is married to Robert Kiyosaki, and she speaks from a woman’s perspective on why this is so important, especially for women. This could be one of the best investments to make in your 20s. 

Please read about my journey of how I started investing in real estate for the first time!

10. Start a retirement account

chalk drawing of piggy bank, three dollar signs, and 401k

If your job offers a 401k or another retirement account, you should take advantage of it ASAP. If your company matches your investment in a 401k, it is imperative to join. It’s free money; why not participate?

You should still do some research on how it works and monitor it once you invest. If your company does not offer or a Roth IRA account. If neither of these options sounds appealing, it may be worth it to invest in the stock market using a user friendly app like Stash. Stash makes it easy to pick, buy and sell

 

11. Set a budget

My favorite book on budgeting is The Debt-Free Spending Plan by Joanneh Nagler. She sets up an easy step-by-step process on balancing your budget so you can get out of debt. But it’s useful information for even someone who has little to no debt, in my belief.

12. Pay More on Your Debt Than the Minimum

There’s no way you can consider yourself wealthy in your 20s if you have a mountain of student debt, credit card debt, or heck, any obligation. If you do have debt, pay more than the minimum to get ahead. I currently make sure to pay more on my long-term debts, such as my mortgage, car payment, credit cards, student loans, etc.

Just by paying one more extra amount a year on my mortgage alone, I am cutting seven years off the time it takes to pay off. Pay more than the minimum, and your debt will shrink quickly.

13. Pay Down Your Credit Card Debt

If you are paying down debts, the one to pay off first is credit card debt. It costs you a lot in interest fees to have a revolving balance on your credit cards, so make a point to pay those first.

Start with the cards with the highest interest rates by paying more than the minimum on those. Don’t forget to pay the minimum on the others, though! Once you pay off the highest-interest rate ones, make your way to the next.

Read about how to avoid credit card debt here!

14. Choose a Career Where You Can Get Rich

There are many career choices out there, and if you plan on becoming wealthy in your 20s working for someone else, it is best to choose wisely. There are certain jobs out there where people are capable of being rich while working for someone else. A few of those include a CEO, Marketing Manager, IT Manager, and Pharmacist, to name a few. Check out this article on careers that can make you rich (especially if you are a woman) for more ideas!

15. Get Insured

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If you do not have life insurance, you should get some as of yesterday. The benefits of getting insured while you are young and healthy are that premiums are relatively small for you.

You could get disability insurance as well as insurance if you were to pass. Make sure to get enough to cover your funeral costs and pay off your debts in this case. In some of these insurance policies, they work like money market accounts where you take money out of them if needed as well.

16. Track Your Spending

Joannaeh Nagler loves writing about “your little magic notebook” in The Debt-Free Spending Plan, and she talks about how you should document every single purchase you make in your notebook. Not only is meticulously tracking your spending important because you can see where your money is going, but it also makes you think before completing a purchase because you have to take your notebook out. If you find it too frivolous to record, you shouldn’t buy it.

This is certainly one of the most valuable tips to become wealthy in your 20s. Track your spending, and it will open your eyes and hopefully change some bad habits. There are some great apps out there that do this for your automatically, like Mint. Check them out!

17. Find Ways to Cut your Costs at Home

I love cutting costs at home. I find myself unplugging unused appliances from walls, taking shorter showers, and even using less electricity during the day. Buy generic groceries, switch to the off-brand cleaning products, and even start making your chicken stock at home.

You can do so many things at home that can save you money that I am not going to delve even into any further. Just stay mindful of this one. Think: How can I save more money at home? We have a great article here on 20 ways to cut home expenses you should read.

sign saying cost cutting, next exit to show ways to be wealthy in your 20s

18. Learn to Haggle

I suck at negotiating, despite all the books I’ve read about it. But there is one haggling tidbit I learned from The Five Lessons a Millionaire Taught Me for Women. In it, the author talks about learning the magic question, “Is that the best you can do?” when someone gives you a final price for something. I tried this out when I ordered a rental car and was amazed it worked.

The guy I spoke with gave me a price and told me about all the discounts he made on the rental for me. After his explanation, I politely asked, “Is that the best price you can do?” He told me to hold and came back five minutes later to say he cut an additional $60 off my bill, and the price he gave me was now the best he could do. Those words were magic, and I highly encourage everyone to use them!

19. Ask for Decreases on Your Bills Regularly

 

This is a trick that my husband loves that I do every few months or so. I call one of our bill providers, such as our internet provider, and I ask if there are ways to lower my bill. I have been doing this for years and have had much success with it.

The squeaky wheel gets the grease, so make a point call and directly ask for decreases on your bills. The worst they can do is say no. If this sounds like a big hassle, turn to Trim to help you out.

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What would you do with an extra $600 a year? Well, that is the average amount Trim saves their customers per year.


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20. Cut Out the Unnecessary Expenses

If you are still buying expensive coffee a few times a week, eating out for lunch with your buddies every day, or impulse shopping, stop what you are doing right now and put that extra cash in your savings. Otherwise, you’ll probably never be wealthy in your 20s.

Successful people spend money on things they like. And you can too! Refer back to lesson number five if you need more guidance on this one.

Want more tips on expenses to cut? Check out our article on cutting back on costs here

21. Learn More About Ways to Save and Earn

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Last but certainly not least, if you want to have a lot of money use these tips to start building wealth in your 20’s. But you need to stay open to learning more about your finances. There are even upwards of 100 ways to become a millionaire! There is so much information out there that we have no excuse to be irresponsible with our finances.

The more you learn, the more you can increase your net worth! Keep learning, stay nimble, and get wealthy in your 20s (and if you figure out how to become a millionaire by 25, let me know!) Good luck! 

 

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21 Ways to be Wealthy in Your 20s

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19 Comments

    1. Such an abstracted and interesting topic for the futuristic genres, and this is too good for the new generations to develops their motive to do something else for their passions, there are now too much for to invest in it for these circumstances, Crypto exchange software-USA are helping those who want to grow in Blockchain society in the world.

  1. Budgeting is so hard and these are great tips! Every six months to a year I ask for our internet to go down in price and if they won’t do it we usually switch providers. It’s just not worth paying a ton of money for when they will give you a discount!

  2. I was too busy paying off my university student loans. I couldn’t save money at all in my 20s. I wish I had done a better job though in my 30s.

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