Personal Finance for 20-Somethings

Personal Finance is one of the most overlooked subject matters in collegiate education today. Without a formal education in finance and/or accounting, young professionals and recent college graduates are forced to take a tumble before properly learning about managing one’s personal finances. Many of these problems can be avoided by simply following some very general principles agreed upon throughout the financial industry. In this blog, I hope to better-equip young professionals and recent college-graduates by providing useful information on financial responsibility, and proper money-management.

Establish a Budget

Piggy bank and coins

Good choices early in life will go a long way (photo: Getty Images)

The first and foremost rule of managing one’s personal finances is to establish a budget. Receiving your pay, and knowing exactly how to allocate those wages is taking initiative of your financial health and security. After adding up necessary expenses such as rent, utilities, food, and any other outstanding debt payments you may have, you can then calculate and determine how much you are able to spend on yourself.

Living within your Means

I chose this as the second principle in order to stress the importance of the first, as living within your means can go hand-in-hand with establishing a budget. This rule should be enforced almost religiously, as it is the primary reason why so many individuals fall into eternal voids of debt with creditors and banks. Steering clear of unnecessary debt, and living an affordable lifestyle encourages a lifetime of wealth building practices like saving, and investing.

Save your Money

Your paycheck does not need to be spent in its entirety. Hopefully, if any cash is left over after your expenses have been paid off, save a percentage of it for future use.

Establish an Emergency Fund

Going along with the previous point, it is also important to save in case of an emergency. Financial advisers recommend to save 3-6 months worth of living expenses. This will ensure that no unexpected or unwanted situation can break a future budget, or savings goal.

Educate yourself on Personal Finance and Investing

Although you may have to subtract this from your daily budget, books on these subjects can become invaluable tools and resources to look back to throughout your life. There are also plenty of free resources online one can access, without the need of dishing out any additional cash. Knowledge is power.


Parallel to saving is investing. Once you become familiar with basic investmenting, plan investment strategies according to your salary, and any other additional income. There are a multitude of outlets in which you can invest through, and even more financial instruments to invest in. Define your investment goal, and remember to always diversify your investments.