The money advice we needed in our 20s (and still stand by today) / 76

When you’re in your early 20s, it’s easy to feel like you have so much time to figure money out later. Retirement feels impossibly far away, investing feels intimidating, and honestly, a lot of financial advice can feel disconnected from real life when you’re just trying to make rent, navigate your first job, or recover from the chaos of college.

The truth is, though, some of the smallest financial habits you build early on can shape your life for decades — not because you need to do everything perfectly, but because small, consistent choices really do add up over time. And while this episode is centered around what we wish we knew in our 20s, almost everything we talk about applies no matter your age or stage of life. It’s never too early or too late to start building habits that make your financial life feel calmer and more intentional.

In this conversation, we’re sharing the money advice we genuinely wish someone had told us earlier, from tracking our spending and avoiding lifestyle creep to building credit, learning to invest, and figuring out what actually matters to us.

✨ Episode Highlights ✨

• [02:00] Why tracking your spending is the foundation of intentional money habits
• [03:30] The personal finance books that helped us finally understand money
• [05:00] How to spot “money leaks” and spend more intentionally
• [06:30] Two simple questions to ask before buying something impulsively
• [09:00] What lifestyle creep actually looks like in your 20s
• [13:00] Why learning to cook is one of the best money-saving skills you can build
• [15:00] The financial advantage of cheap housing situations early in adulthood
• [17:00] How to prioritize experiences and travel without overspending
• [19:30] Building credit responsibly and why starting early matters
• [23:00] Emergency funds, future goals, and using extra money intentionally
• [27:00] Why investing early matters more than investing perfectly
• [32:30] Talking about money with friends, asking for help, and taking imperfect action

✨ Resources ✨

• Our 2 favorite personal finance/investing books: I Will Teach You to Be Rich by Ramit Sethi and The Simple Path to Wealth by JL Collins
• Budgeting tool: YNAB (You Need a Budget)
• Finance Girlies’ Investing Before You’re Ready workshop
• Finance Girlies episode on bank accounts: Q&A: Choosing the right bank accounts / 3
• Finance Girlies episode on travel: Points & miles 101 with Ross Alcorn: Turn your credit card rewards into free travel / 52
• Finance Girlies episode with Arden Missal: She didn’t want to shrink her lifestyle — so she paid off $150K in debt, fast / 74

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Transcript

SPEAKER_00 0:00

Hey girlies. As two ladies who are in their early 30s, we thought it would be really fun to do an episode on things that we wished we knew back when we were in our early 20s. And so we want to share with you kind of a decade into the future, some of our wise wisdom that we've collected. And this is a great episode to share with recent college grads or anyone who's starting their financial journey because honestly, these tips can apply to any age.

SPEAKER_01 0:29

Welcome to the Finance Girlies, a podcast for millennial and Gen Z women who are curious about money but have never quite felt at home in traditional finance spaces.

SPEAKER_00 0:37

We are Emily Backdorf and Cassidy Horton, podcast hosts, longtime friends, and finance writers for brands like AOL and Yahoo Finance.

SPEAKER_01 0:45

Rather than giving you prescriptive advice, we talk about money the way friends actually do. With stories, questions, and a lot of figuring it out in real time.

SPEAKER_00 0:53

So, for some context, I started getting my finances in order around 2016. And at the time, I was 22 years old and I was in this situation where I felt like I was incredibly stressed about money. I was incredibly stressed about spending money, but I also wasn't doing anything to track my money or to keep tabs on how much income I was bringing in versus expenses that I was having. And I just remembered feeling so stressed and fed up that I eventually started experimenting with tracking my spending in a spreadsheet. And this kind of failed miserably at first because for about three months, the only thing that I would do is at the end of every month, I would kind of plan out what I thought I spent that month, and then I would compare it to what I actually spent. And every single time I spent way more than I thought I did. And I quickly was like, you know what? Spreadsheets aren't for me. I think I need to move on to something else. So I started using a budgeting app. And the budgeting app I started using is you need a budget. Wineab for sure. Emily and I both use it. Uh, still to this day, we do. And so anyway, my first tip and piece of encouragement, because it was honestly where my financial journey started, was just to start tracking your spending so you can learn how to spend your money intentionally. And whether you track your spending using pen and paper, a spreadsheet, an app, whatever, that's a very personal decision. And I would say just go with truly whatever feels like the most right option for you because it varies for every single person. But the first thing that I wish I would have known earlier in my 20s was just how important it is to start tracking your spending.

SPEAKER_01 2:26

Yeah. Similarly, I when I started getting serious about my finances, I was probably two years out of college. I tracked all my spending with pen and paper. I was years away from ever starting to use a budgeting app, but I do feel like the pen and paper thing worked for me for a while. So if that's where you start, that's totally fine.

SPEAKER_00 2:47

Yeah, I will also say that I think uh before I actually started taking action on my finances, I did start reading a few personal finance books, and maybe these are tips that we'll get to in the future. But I feel like I was curious enough to where I picked up a book, and honestly, this was back in 2014, 2015. So the book was most likely Total Money Makeover by Dave Ramsey, which I probably would not recommend. There are better, more modern, uh less mean and restrictive options out there. But it I did learn a lot from those books, and I think just by exposing myself to a little bit of financial literacy, I got to the point where I was like, okay, I feel the itch to really get my finances in order. I don't know how to do it. I know I need to start tracking my spending. And then that's when I moved on from the spreadsheet. Spreadsheet didn't really work after a few months, and I moved on to a budgeting app. So that was kind of my like a broader view of my journey.

SPEAKER_01 3:39

Yeah, let's I know we were gonna recommend a couple books, so let's do that now as well. Because that's also how I kind of started learning. And you and I both are readers. I know not everyone is, but if you do like to read, I think reading a personal finance book is a great way to learn. We both recommend I Will Teach You to Be Rich by Ramit Seti and The Simple Path to Wealth by J.L. Collins. I will say I will teach you to be rich is kind of an all-encompassing. Like if there's one book you read about personal finance, I would say make it this one because it truly covers everything you need to know in a very simple yet thorough way. And then the simple path to wealth is pretty much just about investing, but it's a fantastic book about investing. And if you're intimidated by investing, we'll talk a little bit more about that in a little bit. But that book makes it seem really approachable, even if you have no experience. If reading is not your thing, then I would say YouTube videos, podcasts, just exposing yourself to different personal finance topics at a young age, I feel like will give you such an advantage as you begin to earn more money and and learn more, get more experience.

SPEAKER_00 4:49

Yeah, for sure. Yeah, a simple path to all die, I was like so stuck and afraid of investing. And that's the one book that I read where I was finally like, okay, I think I can take action on this and be okay. So those are two excellent book recommendations. As you track your spending, though, something that's gonna naturally happen is you are going to find what I lovingly like to call money leaks that you can plug. And a money leak is a thing that you are spending money on that you maybe don't even realize you're spending money on. And because you don't realize you're spending money on it, a lot of times you could very easily cut out that expense and not even miss it. And so the most obvious examples are like I can think of myself right now, I have an Audible subscription that I've been paying for, and I have not actually bought a new book on Audible in a month or two. So like I could easily cut that $16 expense and not even miss it because I haven't used my past credits yet.

SPEAKER_01 5:41

Well, I think if you are a new college grad, one thing that I remember is like as a student, you might get all these great promotions on subscription services like Spotify or Amazon. Um, and then as soon as you graduate, those things might expire and you might actually have to start paying for them. Like for me after college, I never really used Amazon. So that was an easy thing to decide not to pay for anymore. I think I canceled Spotify as well, and now I share one with my husband. But anyway, just seeing what subscriptions you have, especially other things would be like gym memberships you get a deal on. Not saying you have to like cut all of these things out as soon as you have to start paying full price for them, but just think about which ones you actually want to keep and will continue to use.

SPEAKER_00 6:28

I will also say in that same vein, if you are someone who is prone to overspending or you identify as an overspender, I know I went through a season where I kind of did in college, especially when I wasn't tracking my spending yet. I felt like I used to just go to a random store and spend $20 in between classes, do whatever, and then all of that adds up, especially when your income is tight. I started asking myself two questions before I would make a purchase. And I created these questions for myself in college. I still ask myself these questions before I buy anything random or unplanned, and they truly do help kind of like snap me out of my desire to buy something if I don't actually want it or will use it or need it. And so those two questions are am I excited to use this thing immediately? Like I try to envision myself before I even go to the checkout, bringing this thing home and what am I gonna do with it? Am I gonna be super excited to wear it tomorrow if it's a piece of clothing? Am I going to be super excited to use it? If it's like something for my kitchen, like whatever it is, I'm like, what am I gonna do with this thing as soon as I bring it home? And if I'm just gonna like put it in a drawer or wait and use it at a later point in time, that's a sign for me that like I think I want the dopamine hit that comes with buying this thing, but I don't actually think that I want this thing. And then the second question is, especially if an item is on sale, is would I pay full price for this item? And if you would not pay full price for it, chances are you might just be interested in buying it because it's on sale and it feels like a good deal and you don't want to miss out.

SPEAKER_01 7:50

Yeah, that's a great question. I feel like during college and shortly after I not that I was a big spender, but I was very drawn to sales, just trying to be budget conscious, but I can think of a couple things off the top of my head that like I wouldn't have bought that thing full price. And it was not long before it ended up going back to goodwill. So I feel like that is a very early 20s mindset. It's like get the sales, take advantage, but just like take one extra beat before you purchase to like actually think that through.

SPEAKER_00 8:21

I remember growing up, like my my mom and I used to, like one thing that we used to always do together was just go shopping. And a lot of times, I mean, our shopping was like at Ross or something like that. And I remember so many times as a kid her holding up the shirt and being like, Do you like this shirt? And I'd be like, No, not really. And she'd be like, But it's only four dollars. Are you sure you don't like it? And I'd be like, Well, I don't I don't know. And then I like don't want to disappoint her, and I'm like, I really don't think I like this shirt, but it's only four dollars, so sure. And then it would sit in my closet. And so that happened so many times throughout my childhood that I as soon as I started asking myself these questions, I kind of looked back at all of those experiences and kind of laughed, like, could have just saved the four dollars. Like wasn't gonna wear the shirt.

SPEAKER_01 9:06

Yeah, no matter how good the deal is, if you're not gonna use the thing, it's not a deal. Remember that? Okay, our next tip thing that we wish we knew in our early 20s was to avoid lifestyle creep as much as we can. Lifestyle creep is when, you know, you get your first full-time job, you have a paycheck, salary, and you feel like, okay, now I can afford, you know, a nicer apartment, a nicer car, I can go out to eat. I'm not a student anymore. And and this can happen at any phase in your life. Like if you get a raise or a bonus, you switch jobs, whatever. But essentially it's like raising your spending to keep up with your increased earnings. So we just talked about this on a very recent episode with Arden Missile. She, her story that she shared on the podcast was how she graduated with a very high-paying job, but she knew from the start that she wanted to prioritize paying off her student loans. So she was very intentional about avoiding lifestyle creep and directed all of that extra money to her student loans instead. So I think what's really powerful about her example is like if you don't get used to a bigger apartment, you know, nicer groceries, a luxury car, like you're not gonna miss those things. So if you can avoid it right out the gate and like put that extra money towards savings or investing or, you know, spending intentionally on the things that you do really care about, um, I think you're gonna set yourself up really well for the future. Kind of in that same vein, one thing I would recommend to recent grads or people in their early 20s is to some extent, just buy the minimum viable thing that you need. So the example that comes to mind right away for me is a car. When I graduated college, I was moving across the country. I knew I would need a car. And there were like a list of very important features that I cared about. I was moving to a rural place with lots of snow. I knew I wanted high clearance and four-wheel drive. That was like very important to me. And I got like an almost 20-year-old SUV that checked those boxes was a great deal and lasted me well past that season of life. And looking back, like that was a great decision of buying the minimum viable thing. Yeah.

SPEAKER_00 11:31

I also think for me that buying the minimum viable thing ties back into avoiding lifestyle creep that you go hand in hand because I think what you will value as an adult is so individual to you as a person. Like, I am also someone who doesn't really care about having a very fancy vehicle. Like, I don't know anything about vehicle brands, really, don't view them as a status symbol or anything like that. And so for me as an adult, like I value having a reliable vehicle, preferably like a hybrid that gets good gas mileage. And truly that's about it. And so whenever I'm looking to buy a vehicle, I'm I'm looking for those things and like how I can get the best deal on something with the things that I care about. And that's it. I'm not seeking out like a BMW or something like that. And so I think too, as you continue to get older, just becoming more aware of what you actually value as a person, not what society says that you should value or what status symbols you should have, but like truly what will meet your needs and like increase your quality of life for you individually, the the more you become aware of what those are, then I think the more you will naturally avoid the kind of lifestyle creep where like you're just making your life more expensive for the sake of making it more expensive in an effort to keep up with the Joneses or something, versus allowing yourself to spend more money in areas that feel very important to you. Yeah.

SPEAKER_01 12:56

Our next tip is to get comfortable cooking for yourself if you are not already. And this doesn't mean that like you can never go out to eat or you shouldn't go out to eat, but truly just knowing how to cook for yourself and not having that be this like big point of stress in your life is such a good money-saving skill that like you can fall back on as needed. If something happens and you're in a season where you need to save a bunch of m quickly and you are somebody who eats out several times a week, just cooking for yourself is going to help you save money really quickly. And it's just like a good life skill to learn at this stage too.

SPEAKER_00 13:37

Yeah, I have a friend who is currently on a pretty tight budget and she eats, I mean, she loves beans, but she eats so many beans, like beans and rice. It's kind of a joke. I'll be like, What are you having for dinner tonight? Let me guess there are beans, and she's like, Yes, there are. Um, and she eats other things too, you know, like lots of produce and stuff, but she almost entirely cooks for herself and makes sure that it's like relatively inexpensive, but like nutritious meals. And I imagine her food budget is microscopic compared to mine, for example, where I feel like even when I'm cooking at home, I'm valuing convenience just a little bit, you know, where it's like, what can I get from the freezer section of Trader Joe's? Right.

SPEAKER_01 14:22

So but it is something that like there's a steep learning curve, but once you get comfortable, it just like I don't know, become second nature. I think it's a really good skill.

SPEAKER_00 14:31

Yeah. I always helped my mom cook growing up, so I thought that I was a pretty good cook. And then whenever I went off to college, I realized I was not a good cook at all. I think I was just really good at following her instructions. And I went through a multi-year period where I would cook something and be so frustrated by how it turned out. And I'm I think well, on one hand, I was trying to cook above my caliber, like I should have tried simpler things, but I will say I finally pushed through that and now I'm I'm like, actually, Kasti, you're you're a pretty good cook. Like every meal that you make for the most part is is spot on for like how you wanted it to be. So if you also feel like you're not a good cook, just pick some simpler recipes and keep experimenting and trying, and you will hone those skills. You will.

SPEAKER_01 15:17

You will eventually. Um, the next step is something from my own experience, which is to take advantage of cheap housing situations. So I feel like I had all the cheap housing situations right out of college. I lived in a it was lovingly referred to as the bunkhouse. It was owned by my workplace, but they're not for too long, but rent was like $180 a month. It was a house meant for nine people, and I was lucky enough to get in there when there was only like two or three other tenants, renters. And so I had my own room. It was great for like that season of life. Big shared kitchen, lots of chaos, you know, friends coming over all the time, but it was it was great for a season and I saved a ton of money. After that, I also lived in on-call housing at my workplace, so this was totally rent-free. I just had to be on call one out of every four weeks for anything that came up with. We had students who would stay overnight on our campus. It was like a residential learning campus. Today that sounds like my nightmare, but for the time being, like early 20s, free rent. I I wish I had done it longer because I think for a lot of people, when you're young, you're already used to living in a dorm or like, you know, chaotic college housing. If that doesn't bother you too much, it's like such a great way to save some money for a couple of years after school.

SPEAKER_00 16:39

And then one of the last tips on how to spend your money intentionally is to really spend your money on experiences, but also take advantage of your youth and do things cheaply when you can. So stay in hostels, camp, road trip. I know Emily did a lot of this, so do you wanna do you wanna kind of speak to your experience of spending money on experiences in your 20s?

SPEAKER_01 16:59

Hmm. Yeah. If if there was a a category in which I maybe spent a little above my means, it was this, but I don't have any regrets. So, like when I lived out west, I've talked about this on the podcast before, but I was not making much money at all. With friends and my now husband, like we would go on really cheap camping trips. We would road trip, we did trips to like the Oregon coast, Yosemite, Utah, like all of these things that I mean, now I live on the other side of the country. And those trips would be way more expensive now. But we managed to do them really cheaply. We stayed with friends, we camped again. We road tripped, we rarely flew anywhere and, you know, split accommodations one year for Thanksgiving. A bunch of friends rented a house in southern Utah, and it was this gorgeous house, but there were probably 20 or so people there. We each paid like 20 bucks for wow, this like these accommodations. I mean, it just things like that. Like say yes to the things that are going to create lasting memories and that you want to do, and just like figure out how to do them cheaply. That's it's my advice.

SPEAKER_00 18:05

Yeah, I love that. Another thing is that especially when you have a lower income, a little extra money can go a long way. So if you have the time to babysit on the weekends, do one to two freelance jobs a month, sell clothes on Poshmark, sell some of your household items that you're not using on Facebook Marketplace, have a yard sale, like anything you can do to earn just a few extra bucks will go such a long way.

SPEAKER_01 18:31

Yeah. This is something I wish I did that I did not do, but I feel like you were kind of the queen of this to some extent for a time in your life.

SPEAKER_00 18:38

Yeah, in in college, especially, like my whole thing was like Poshmark Facebook Marketplace. This also coincided with my like minimalist phase. And so as I was going through my house, I'd be like, What can I sell? I haven't used this thing in three months, it's be enlisted somewhere. And so I I really I mean, I felt like I was bringing in at least an extra a hundred dollars a month, which whenever you know you're a a college kid with a part-time salary, I'm like, a hundred dollars is a lot of money.

SPEAKER_01 19:07

Oh yeah.

SPEAKER_00 19:08

So just to be like selling random things. So Yeah.

SPEAKER_01 19:11

I guess my thing was babysitting. I did that working at my first full-time job, and I would do it usually like a weekend or two every month, and it added up to a lot of cash. That was like really helpful for me during that time.

SPEAKER_00 19:24

Especially if you're known to be like a reliable babysitter and you're in with a certain family, you know. I feel like that can just be a very natural, easy way to make some extra money. Totally.

SPEAKER_01 19:33

Okay, our next tip is to start building credit. And this is like this comes with an asterisk because getting into debt, consumer debt, like credit card debt, is something you should try to avoid as much as you can. But, and this is kind of like the part of advice that is often ignored in like traditional Dave Ramsey advice, you should start building credit as soon as you can, because having good credit in the future will allow you to rent an apartment, buy a car, get a mortgage, all of these things that are big parts of life and they often require having good credit. So, what I did, and then maybe Cassie, you could show what you did. This was something I was kind of late to. I don't think I opened a credit card until I was 23 or 4. And if you're older than that, don't worry. There's I have friends who were way behind me in that regard. I opened a secured credit card, which how that works is you need a little bit of savings to essentially act as a deposit for your credit line. So I opened this card with $200. I didn't charge much to it. All I used it for was gas. After six months, I think, of responsible, you know, use and on-time payments. That card turned into just a regular credit card and that credit limit shot up. So that's what I would recommend. If you don't have a credit history already and you need to start building credit, start with a secured credit card and just use it sparingly.

SPEAKER_00 21:03

Yeah, I really love that recommendation. I did open my first credit card when I was 18. I remembered I opened it the summer before I left for college. And it was a student credit card through Citibank. I don't remember exactly what it was called. And I'm sure the limit was not more than $1,000, if that. And I was so nervous about racking up credit card debt that I made sure that I paid it off in full every single month. And I was really good about doing that from the start, I think just because of my fear of taking on debt that I didn't need to take on. But I will say if you are someone and you're like, I could be really tempted to overspend or to like swipe this thing and not really worry about how I'm gonna pay it off, then I would really encourage Emily's secured credit card route because it's like a very safe container for building credit, especially when you're new, because the balance is your savings, essentially. So But I did do it a little bit differently. I will also say that one of my favorite reasons for using a credit card, like as soon as I could, especially if you're someone who's going to pay it off in full, so you're not actually accruing any interest or paying any extra money to the credit card company, is just all of the rewards or cash back that you can get that you can then use as like actual cash back, or you can get discounts on gift cards to certain places, or you can use the points for travel. And so if you do want to get a jumpstart on that, especially once again when your income is low, it's like getting $20 in cash back or like being able to use your points to book a hotel or something, like all of those feel like the biggest wins. And so having a credit card, especially early on in your 20s, if you can try to be responsible with it from the get-go, is such an easy way to start taking advantage of those perks.

SPEAKER_01 22:49

That's true. And we have a couple of episodes about how to use credit card points, how we've used points in the past. And we actually brought on some guests to talk about how to maximize credit card points for travel, and we will link those in the show notes. All right.

SPEAKER_00 23:05

Another big tip is to use any extra money you have wisely. And we have a few examples of what this can look like. So the very first thing is build an emergency fund or a comfort fund or slush funding, a rainy day fund. Yeah, whatever you want to call it. But have some extra cash, preferably in a high yield savings account, which we also have an episode on bank accounts and high yield savings accounts we can link below. But a high yield savings account, they're traditionally offered by online banks. They're still FDIC insured. So like your money is safe, but they earn way more interest than a traditional savings account, and they have usually no fees next to no fees. And so you're saving money or you're you're getting to keep more of your money in both of those ways because you're paying less money in fees and you're earning more on your money. And so building an emergency fund so you have a cash cushion of some kind to fall back on when the unexpected happens, because the unexpected in real life will almost always happen, whether you get a flat tire or your cat needs to go to the vet, or you realize your car registration is due and you forgot to budget for it. Now you need to pay $200, like whatever it is, having some type of fun to fall back on will give you so much peace of mind and just so much wiggle room to kind of like breathe and tackle a challenge that comes your way versus kind of panicking and wondering how you're gonna pay for it.

SPEAKER_01 24:27

The next kind of sub tip under using any extra money wisely is to start saving for future goals. And when you're fresh out of college, early 20s, you might not have spent much time thinking about your future financial goals, and that's okay. But think about just just think about like ways you think you might want to spend your money in the future. So maybe you know one day you want to buy a house or you know that travel's really important to you, and you want to be able to take some big trips within the next decade.

SPEAKER_00 24:56

Also, know for me, like from the time I was in college, I I was born in Georgia, grew up in Georgia, went to college in Georgia, and I knew that as soon as I could, like I would want to move to a different part of the country. So that for me was like one of my financial goals in my early 20s, and also one of my reasons why I wanted to feel more financially secure and like have some savings and pay off my debt and all of that stuff, is because I knew that I wanted to give myself the opportunity to live in a different part of the country. I also know for some people it could be like maybe you want to do van life or like some version of van life, whether it includes an actual van or not, or like you want to be a digital nomad or something. I think the key is to think of what financial goals feel really fun for you, like what things feel very much in alignment with your passions and your hobbies and what feels exciting and what like a really fun life looks like for you. Because a lot of times when you think of setting financial goals, especially in your early 20s, because your your life experience, I mean, there's just so much more of it to be had over the course of your life. I think it's very easy to be like, well, now that I'm an adult, I should want to own a house and I should one of my financial goals should be to like have a corporate job and to like get married and to have kids and like I need to, you know, like it's it's very easy to follow this like very prescriptive, this is what I think an adult's life should look like. So I should form my financial goals around this. But I think that's the wrong approach. And I think the most important thing is to turn inward and to be like, no, what do what in the words of Mary Oliver, what do I want to do with my one wild and precious life? Isn't isn't that Mary Oliver that says that? Uh-huh. Yeah. Yeah. So just really think about what feels fun and lights you up inside, and then you'll like naturally be more inclined to use any extra money that you have to actually save for those things versus all of these like kind of cookie cutter handed to you financial goals that might not actually be what you want to do.

SPEAKER_01 26:52

Yeah, that's a great point. And if you know those cookie cutter goals are what lights you up, that's also fine. But yeah, like Cassidy said, don't just like default to what society tells you you should want and what you should save for. And then one more point on this tip is like, even if you're saving $50 a month, $25 a month, like whatever it is, don't stress about the amount. It's more about establishing the habit of saving for these future goals. You can always, you know, increase your savings rate down the road. It's more important just to establish kind of the the habit and the routine of saving.

SPEAKER_00 27:30

Yeah. And then I think the third kind of overarching tip, you know, it's like spend your money with intention, use your money wisely. I guess the third one was like build credit. But then the last kind of overarching thing is like let compound interest do its thing. And what we mean by this is start investing now, like even if it's really small, because you, if you were hearing this and you were in your 20s specifically, you have so much time on your side right now. And I have two examples to illustrate this point of like truly just how much time you have on your side when you're in your 20s. The first story, and I I have told this story so many times because it was a shock to me too. But about four or five years ago, I had a friend at the time. She was 27 years old and she had been a teacher. So she had $3,000 and an old workplace retirement account. And she was like, you know, I I'm in my 20s. It's just $3,000. I'm currently trying to build an emergency fund and stuff. You know, like I would like to beef up my emergency fund a little bit. I'm thinking about just cashing out this $3,000, paying the penalty, which I know isn't ideal, and just putting this money in my emergency fund because it's not a lot. And she was like, you know, what like what would your advice be? Like whatever. So we sat down with an investment calculator to see what it would be if she left the money in there by like 65 or 70 and just didn't touch it. Like she didn't add anything to it, but she also didn't remove it. She just let it grow and do its thing. And because she was so young, we realized that that $3,000 would could could grow to be $100,000 if she just left it there until she was 70. And that's purely because she had so much time on her side to let it grow in the stock market. And so just imagine putting $3,000 in and being like, if you don't touch this for 30 something years, 40 years, it could be $100,000. Like that is huge. And then my second example is Emily and I just interviewed someone on the podcast, Brittany Flammer, who talks about how, you know, she and her husband have five children, and for most of their relationship, their salary has been around $37,000, but they have been diligently saving and investing what little bit of extra money that they have, like since their early 20s. And fast forward out now 20-ish years, I believe, their net worth is almost $1 million, even though like their salary has never been much more on average than like $37,000 or $40,000. And so I think they are also such tangible proof of small actions really paying off in big ways when you're just consistent and when you have enough time on your side to let compound interest do its thing.

SPEAKER_01 30:02

And if you're hearing this and thinking, sounds great, I'd love to start investing, but I have no idea where to start. We actually have a workshop called Investing Before You're Ready that you can access at thefinancegirlys.com slash invest. And don't neglect a workplace retirement plan if that is something you have access to with whatever job you end up with, you know, after graduating. Many jobs provide a 401k or 403B for their employees that allow you to make pre-tax contributions out of your paycheck. So essentially you get paid, but before that money even lands in your account, you can have your employer take some out and put it into a retirement account for you. And that's great for a number of reasons. One, you don't see that money, so it doesn't feel like you're missing money from your paycheck, or you know, it doesn't feel like another bill. It's just automatically deducted. It'll also lower your taxable income, uh, you know, depending on the type of retirement plan you have. And third, some employers will offer a match. Essentially, that is say they match 100% of your contributions up to 3% of your salary. If you say, I'm going to contribute 3% of my salary to my 401k, then your employer will contribute also 3% of your salary to your 401k. So you'll end up with 6% in your account. So a lot of financial advisors or financial educators will refer to that as free money because essentially you're getting a hundred percent return on anything you put into your retirement account if you get that employer match. If you can afford to contribute and get that match, that is a really great thing to do.

SPEAKER_00 31:52

Yeah, and that's also just a reminder that if you are currently investing in a workplace plan, you have some type of retirement plan, like you are technically already investing. I think a lot of times we think of investing as this extra thing that you have to do and you have to set it up and like your 401k contributions that come out of your paycheck don't count, but they do.

SPEAKER_01 32:12

And one more thing on that note, when you're investing, make sure that you're not just putting money into an investing account. Make sure you're actually going into that account and investing the money. I'll give a quick example. When I was in college, I opened up a Roth IRA and just contributed a small amount to it and then just kind of forgot about it and let it sit there. I logged into that account maybe two years later and realized that money was not invested. Um, it was just sitting in what's called a money market fund. So it had earned like a little bit of interest, but it was not invested.

SPEAKER_00 32:47

And then just a few other things. Like as you continue to move throughout your 20s, just remember to be curious about yourself and your spending habits. I think curiosity is truly one of the best habits you can continue to develop just about yourself and the world around you.

SPEAKER_01 33:03

I know that convenience always costs more money. Sometimes it's well worth it, and sometimes it's not. So just before you opt for, you know, all the convenience, grocery delivery, Ubers, all these things, just weigh the opportunity cost. Another tip is to, if possible, talk about money with your friends. I feel like I was lucky enough in my early 20s to have some friends who are also interested in personal finance and were willing to talk about it. And that just makes such a huge difference when you feel like you're not alone on this journey.

SPEAKER_00 33:33

The same thing with our freelancing work. I feel like my free as a freelancer, my income started to grow. Like I started charging better rates and all of that stuff once I started talking to other freelancers about like, hey, what do you actually charge for this thing? Or, you know, what does your workflow look like for this? And so just being able to have these open conversations with people, it just gives you so much more confidence that like you are doing the right thing, or it might show you maybe things that are possible that you didn't think were possible. So, and then the very last thing I will say as you move throughout your 20s in your adult life is don't be afraid to use resources that are available to you when you need them. And my most tangible example of this is like if you ever find yourself in a season of life where you are earning a low income and you find out that you qualify for SNAP, which is food assistance, don't like, don't be afraid to use it. If there is a food shelf in your area or a food pantry where you can go and get food, especially in times where cost of living is really high, gas prices are high, grocery bills are high, all of these things. Like, look at what's available in your area for you to use and do not be afraid or shameful about using those resources, especially if they are available to you.

SPEAKER_01 34:49

I also know through my husband's work, there are also things like, you know, grants for moving to new areas and affording rent, you know, if you're moving somewhere for a new job or if you buy a house. You you might be able to get uh weatherization done to like lower your energy bills, things like that. So just do some Googling and you might be surprised what you qualify for, um, depending on where you live and and what nonprofits are in your area or what state funding is available. So there are resources out there.

SPEAKER_00 35:20

Okay, in closing, I know Emily and I just covered a ton of stuff. So to try to help you like narrow it down and to create this a little more tangible and actionable, we just want to leave you with a few last minute tips. And the first thing is just to start where you are. So like maybe you hear this episode, you're like, wow, they have thrown so many good ideas out at me. Maybe pick like one small action you can do this week to make progress on your finances. And maybe that is like reading one of the books that we recommended at the beginning, which is I Will Teach You to Be Rich or A Simple Path to Wealth. Or maybe you say, you know what, I'm gonna track my spending for 30 days and just be curious about myself and see what happens. Or maybe you look through your expenses and you say, I'm gonna cancel one subscription that I haven't used recently and see what that does. Like it can be truly as simple and actionable as you want it to be. And along that same line, just remember that like taking action matters more than perfection. So don't let the fear of doing something wrong with your finances stop you from even starting because you will get better and start building the habit as you go.

SPEAKER_01 36:22

And don't forget to celebrate your wins, even if it's a small one. Those wins will compound over the years and they are worth celebrating.

SPEAKER_00 36:30

As a reminder, if you liked this episode, don't forget to send it to someone who could also use these tips. So thank you all for being here. See you next week.

SPEAKER_01 36:42

That's a wrap on another episode of the Finance Girls podcast. Nothing in this episode is meant to be taken as financial advice.

SPEAKER_00 36:49

Please do your own research and talk to a professional if you need advice. Or if you liked this episode, consider leaving a review. Better yet, add another show to a friend who might enjoy it too. Love ya. Bye. I nailed it.