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Pretty much every person out there would really like to have a lot more money in the bank. Even the most generous people out there could use some extra cash once in a while. Developing good financial habits in your 20s and 30s is the key to having a rich financial future, regardless of what amount of money is rich to you.

Since our schools hardly teach any real financial education, we really need to keep ourselves informed and know what the heck is going on with our finances. For this reason, I compiled a list of 15 financial habits that will make any 20 or 30-something rich from today, and until forever. Here’s to a better financial future!

1. Start Investing

Investing can seem really complicated to get started with, but it’s the absolute best habit to develop at a young age because your money can be worth so much more when it’s invested. Investing can be extremely satisfying but most people really don’t know where to begin.

You can start as easy as just downloading an app, seriously, there’s an app for investing that will get you started easily. Acorns is an app that will invest your spare change, and take the complication and guess work out of investing for your future. It may not amount to much, but even your spare change can be a great investment.

Acorns will round up your purchases and invest the difference (i.e., if you spend $4.80, Acorns will invest the other $0.20 automatically).

2. Create a Budget You Understand

There are a ton of different budgeting techniques out there. Some of which can be pretty complicated, and it can take a bit of work and research to truly understand what all your options are. Don’t worry about trying to blend different budget options together, pick one and stick to it for a while, if it doesn’t work, move on to a new one.

You want to make sure that the budget you land on is something that you can easily understand without pulling out your hair. Something that could work for you and is super easy to following is the 50/30/20 Budgeting Method, however, this method may be too broad for some people as it does leave a bit of wiggle room.

If you’re looking for a budget that is a bit more specific and gives a plan for every single dollar, the Zero-Based Budgeting Method may be the one for you. I think that this method is the best for someone who has never had a budget because it gives every penny a place to be and can really take a lot of the guesswork out of budgeting.

Budgeting is one of the best things you can do because it will make a plan for your money and make your money work for you which means you’ll be under continuous financial improvement. You’ll have money budgeted for things you really want and won’t spend money on things you don’t truly need.

3. Use Every Method to Save

We live in a world where we can’t avoid spending some money, we need to buy things like food and clothes just to survive. That’s why you need to learn some awesome ways that you can save money when buying things, especially online.

For example, any time I am making an online purchase I use Rakuten. This is a free service that gives you cash back on stores like Amazon and thousands more that you already shop from. You’ll get a quarterly payment based on money you spent that you can use toward savings or investing.

There are even crazier ways you can try to save money that we can learn from our grandparents and other generations. I wrote an entire article on some Old-Fashioned Frugal Living Tips… That Still Work!

4. Plan Ahead for Big Expenditures

Have you ever been the type of person who knows they need $500 for something in 6 months, but you just decide to not save the money for it until the month before? That definitely makes life a little more stressful, doesn’t it?

A really common thing that people always forget to save up for is the holidays, and December comes every year, it doesn’t sneak up on us. That’s why I love setting up a sinking fund for the holidays.

A sinking fund is a bank account that has one specific purpose and you put a small amount of money in it each month, for example $50 a month for the holidays adds up to $600 saved by the time December rolls around.

5. Have Emergency Money Ready

Young people are pretty well known for thinking that we are invincible. We think things like “I’m young, I can’t get sick” or “I’m young, I can’t get fired!” we’re huge fans of ignoring the real possibility of bad things actually happening.

We need to have emergency money handy at all times because you never know what is going to happen tomorrow. You could break a bone, lose your job, or total your car and if you have an emergency fund you’ll be able to deal with this emergency much easier.

An emergency fund will help give you the peace of mind that will make you way less stressed when the little things happen, and this can help you avoid paying with credit cards and continuously building up more debt.

6. Take a Side Job for Extra Income

You are never going to be younger or have more energy than you are right now. We are living in a weird time where just having a 9-5 income isn’t going to let you live a life that you’re proud of and accomplish all of your goals. So many of us complain about our jobs and lack of money, but we spend our evenings on the couch watching Netflix and eating Doritos.

I’m a huge fan of starting a side hustle, and it doesn’t even need to be something that takes up all of your free time. You can start a side hustle that will make you a few hundred dollars a month with just a couple hours of work per week.

There are a ton of options for side hustling too, you could Walk Dogs, Proofread, Deliver groceries with Shipt, and so much more!

7. Track Your Credit Score

Credit scores are one of those things in personal finance that everybody has, but not many people actually understand. Your credit score is a 3 digit number that can help you get lower interest rates on things like car loans, mortgages, and credit cards.

Tracking your credit score is insanely important because even the smallest mistake on your credit report can harm your credit score for a long time, and it may not even be your fault. When trying to track your credit score, you have two options:

  1. Use a Free Service (Credit Sesame): A free website like credit sesame can let you constantly monitor your credit score for completely free and won’t ding you and lower your score for you looking at it.
  2. Get a Yearly Report: You are entitled to one credit report from each of the credit bureaus that will show you everything that is on your official credit report.

8. Start Meal Planning

Wasting food and eating out are two of the biggest money wasters that we seem to do without really giving it a second thought. You’re never going to have a ton of money in the bank if you’re constantly spending your money on food that you aren’t even going to eat.

Meal planning is one of those things that you need to develop early if you really want to make it a habit that will stick. That’s why I love services like $5 Meal Plan, they will send you a meal plan each week with a grocery list for only $5 a month. It can really help you save money on eating out because you’ll be given awesome meals to make yourself!

9. Live Way Below Your Means

Something that took me a while to realize is that I don’t need an expensive car, I don’t need a designer purse, I don’t need a $50 t-shirt. What I’ve realized is that financial security is much more important than material things. Living below your means allows you to save so much more money and spend money on the things you really need.

10. Skip Expensive Food and Drink

Now that you’re out of college, you’re no longer eating ramen noodles and mac and cheese for every meal. I totally understand the desire to start being an adult when it comes to what you eat, but it doesn’t mean you need to be eating out for every meal.

You can find some amazing recipes online and start cooking your own meals, or us a service like $5 Meal Plan like we talked about earlier.

11. Minimize Your Life

Minimalizing your life can be a great way to both make money and save money. No one needs a wardrobe with 100 items in it (unless you’re a fashion model, or maybe a Kardashian). If you can declutter your life and get rid of anything that doesn’t bring you joy, you can easily make a couple hundred dollars by selling everything you don’t love.

There’s a really amazing book that can help you declutter your life, The Life Changing Magic of Tidying Up by Marie Kondo, that can truly help you be more minimalistic.

12. Choose a Modest Place to Live

Did you know it’s not recommended to spend more than 25% of your take home income on your house/apartment? Living on a low income? Stay with friends or family until you can get your income up, or get a roommate who can help you offset a lot of the costs.

A lot of people seem to think that if they can’t afford their dream home by the time they turn 25, they are a failure. However, most of us won’t be able to afford even half of our dream home by 30, so stop rushing! You don’t want to end up being house poor and having no money to put toward savings or investing.

13. Don’t Avoid Your Student Loans

Unfortunately, your student loan debt isn’t going anywhere. It doesn’t just disappear. Even if you file for bankruptcy you’ll still have to pay back your student loans. Avoiding your student loans is just going to add more stress to your life for longer, so it’s best to make a plan to start paying them off.

14. Start Saving for Retirement

When you’re young, you don’t want to think about your life after 65. The truth is, time flies and retirement really isn’t that far away. You may think that you don’t need to start for many years, but that’s just not true.

The more money you start to save now, the more money you’ll earn in interest by the time you turn 65. That’s the good power of compound interest!

15. Don’t Depend on Credit Cards

There’s this common feeling among people who carry credit cards that their credit limit is just money that is available for them to spend. This means people think they can just hit their credit cards with all sorts of charges and everything is just going to be okay.

I’ll be honest, I’ve been that person! When I was in school I was working 30-45 hours a week and making decent money. I lived at home with very few expenses and my credit card was still maxed out every single month. Why? Because I didn’t know any better. I assumed that everybody lived with credit card debt and that it was normal to have a maxed out credit card.

If you want to know more about how to handle credit cards properly, please read: Credit Card Rules You Must Be Following!

16. Never Finance a Car

Car payments can be a serious burden if you can’t truly afford them. Once again, car payments and buying a new car can be really normal but you don’t want to be normal, you want to be rich! If you decide to finance a new car, you’ll end up paying $500+ every single month which isn’t exactly affordable for most of us.

There is no reason why you can’t drive a car that’s 5+ years old while you’re able to build up your wealth and actually afford that car you want so badly. Just because your friends may be driving a new car, doesn’t mean you must follow suit! You have no idea who’s paying for their car, or how they’re paying for it.

17. Don’t Focus on Everybody Else

One of my favourite things I’ve read recently was a quote I saw on Instagram, “Stop keeping up with the Joneses because the Joneses are BROKE”. These days everyone boasts about their life on social media. You only see the best parts of their day, the thing we don’t see is the money situations behind these people!

There’s a girl I’ve known for a few years who posts all the time on social media about trips she’s going on. I still don’t know how she affords it. It’s either mommy and daddy’s money, or she’s charging everything and is in massive debt. Unfortunately, all most people see is the fancy life she’s living and they get serious FOMO.

Focusing our attention on what other people are buying and driving and eating is only going to make us feel worse about our situation. The fact of the matter is, if you just focus on living your life and achieving your money goals, you’ll be much better off in the long run.

18. Never Stop Learning

The most important characteristic a person can have is being humble. If you think that you’re the smartest person in the entire world, you’re never going to improve. There is nothing better for you than to read more books about personal finance and investing and retirement! Never think you’ve learned it all because new concepts come out every single day and the world never stops evolving!

The financial principals your grandparents were able to follow 50 years ago aren’t the same ones that work today. So, if you learn everything tomorrow it’s not still going to work in 50 years! Just keep learning! Wanna know a great way to keep learning about money? Subscribe to the best personal finance blog around, of course!

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Final Thoughts

Personal finance doesn’t have to be scary, it can be simple if you just take it one step at a time. If you can think of any other financial habits that can kick-start your journey towards wealth, let me know in the comments below.

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