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Money Concerns In Your 20s: Setting Up Your Finances Right From The Start

young woman looking tiredMoney concerns in your 20s may seem like a trivial thing since you have just gotten out of school. But considering the current financial situation in the country, you may want to start being serious about your finances early on. Most people are looking for financial tips for new graduates because they are eager to set up their finances in such a way that will help them avoid the mistakes that their elders made. Millennials, or at least those who are still in their 20s have seen how their parents and grandparents struggled with their personal finances. That experience definitely left a mark and is influencing how people in their 20s are reacting towards financial situations.

According to an article published on, the spending habits of young adults are influenced by their friends, social media and the latest recession. Different studies reveal that they are inclined to follow the financial habits of their friends and they rely heavily on what goes on in their social media networks. The Great Recession significantly reduced the appeal of credit cards for the young adults – after seeing how it nearly drove their parents and grandparents under.

Whether this is true for you or not (assuming you are in your 20s), you need to put your prejudices aside and figure out how you will set up your finances today. You need to start it right so that your momentum in building up your wealth will not be hampered by mistakes that could have been avoided early on.

Typically, your money concerns can be divided into two: your debts and your financial goals.

Dealing with your debts out of college

Let us start with your debts. Being in your 20s, you know that one of your major concerns right now is your student loans. The really bad news about student loan debt is simple – it keeps on increasing. Chances are, you graduated with a lot of them in your name.

If that is the case, you need to know that dealing with your debt as early as possible is the best course to follow. By prioritizing this, you are lowering the interest amount that your debt is accruing. It can also help you setup your finances so that you do not have to pass up on financial opportunities because of your debts.

According to an article published on the student loans debt that is now more than $1 trillion is starting to hurt the economy. Not only is it keeping students from making personal investments, it is also causing the government some serious budget cuts on other programs. That is so they can divert funds to help save the delinquent student loans borrowers.

Given that effect, you know that other money concerns is not as great as your responsibility to pay off your debt. This is true even for those that you have incurred in the past like credit card debt or other personal loans.

So how do you do that? Here are some tips for you.

  • List how much you really owe. Make a list of the debts that you owe – from student loans, credit card debts and other accounts that you have opened in the past. Give the details of each debt: the lender, interest rate, current balance and monthly payments. This will help you categorize which of them requires your attention the most. Ideally, you want to concentrate on those with the highest interest.

  • Calculate your payment capabilities. If you already have a job, you need to calculate your income to figure out how much you can afford to contribute towards your debts every month. That way, you can figure out how you will set up your budget. If you do not have a job yet and the 6-month grace period for your student loans is up, you need to research how your unemployment can be used to delay your billing.

  • Create a budget plan. When you have your income, you should list your expenses and make sure that you have enough money to send towards your debts. If it is not enough, your choices are to earn more or cut back on your expenses.

  • Research on the different debt solutions you can use. There are various debt relief programs that you can use to help make your debt payments more organized. You can use debt consolidation programs to simplify the payment process that you have to go through. Research the processes that you can choose from and figure which is most suitable for your specific financial requirement.

Financial goals that you can set up in your 20s

Apart from getting out of debt, you still have other money concerns to take care of. We have consolidated them into your financial goals. What you have to realize is that as you get older, your priorities will change and so will your financial goals. So you need to be careful about how you focus on each one because while you are working on them, they might not be relevant anymore.

But just to get your started, here are some of the money concerns that you can work on in your 20s.

  • Build up your emergency fund. As important as getting out of debt is, you need to work on your emergency fund too. That way, you do not have to put yourself further in debt in case the unexpected happens. You can start with $1,000 as your rainy day fund and just put more money as you go along.

  • Contribute towards your retirement. You also have to start thinking about retirement – yes even as early as now. If you do not want to wait until you’re 80s to retire, you should start saving up for your future. The thing about starting early is you can make small contributions and you can still reach your target.

  • Raising your credit score. This is an important task for you to work on early in your career. This is not just about having debt, it is more of how you will behave towards your debts. You need to learn how to pay off your credit obligations properly. That is primarily, how you will raise your credit score. To give you some tips, here is a video from National Debt Relief that has some tips on how you can improve your credit score.

  • Establishing your career. This is not really a financial goal but it is still important because it will allow you to reach your targets. In fact, most people in their 20s are usually focused on this. Figure out what you want to do and if it can finance the type of lifestyle that you want to have.

  • Acquiring possessions. According to the, student loans, after reaching $1.1 trillion, is starting to affect the ability of young adults to make investments – like buying houses for instance. It ties up around $1,000 per year and any payment made towards interest is actually a lost investment. So as difficult as this may be because of your debts, you need to look into ways to acquire possessions. Do not let your debts keep you from doing that.

The great thing about working on your money concerns as early as when you are in your 20s is you get to have the time to make mistakes. Not that you would not be careful of course. You will still take your time to consider your options but the thing is, you can afford to make risks at this point. So know your options and start working on your finances as early as possible.

In case you need help with your student loans, National Debt Relief recently released their federal student loan product. This is a consultation service wherein they evaluate borrowers in terms of their financial, employment and student loan conditions. They will recommend the right program that you can avail and will even help you with the paperworks. This service will only cost you a one time flat fee that will be placed in an escrow account. National Debt Relief will only withdraw this amount when you are satisfied with the paperwork that was done on your behalf. If you do not get into a program, then the company will not get paid. There will be no maintenance fee or any upfront fees in the service.

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