As a 20-something professional, navigating money can be tricky. Do we want to be responsible with our funds? Yes.
Do we want to live it up and enjoy all our 20s have to offer? Also yes.
We want to be able to travel, go to concerts, attend fun events, and serve looks at the same damn time.
Now, we know what you’re thinking. It’s not realistic to be financially responsible and have fun.
But 25-year-old Certified Financial Planner Raquel Tennant is here to tell you that you can absolutely do both.
As a Financial Planner, Raquel helps clients plan for their financial futures while considering their current lifestyle.
Here are her top 3 tips for all the 20-somethings navigating wealth building for the future while still living it up present.
Not much of a reader? Listen to the full interview with Raquel on The Colors of Her Success Podcast
1. Create a Budget that Reflects Your Lifestyle
If this is you when you hear the word “budget”
…then you probably have the wrong idea about budgeting.
“People view budgeting as a restriction, but it’s just a roadmap,” Raquel says.
Let’s talk about it.
At its core, budgeting is an overview of how much money you have coming in and going out every month. The key to any good budget is being realistic.
Raquel’s tried and true budgeting advice is to create a budget that reflects your lifestyle.
“If it’s something regularly a part of your lifestyle, budget it like a bill.” For all the girlies on a biweekly nail schedule, you’d budget that money as an expense.
Raquel suggests that we typically give up on budgeting because we aren’t realistic about how much we’ll spend.
For me, the most rewarding part of budgeting is seeing your “leftover” money after you pay all your expenses. This “leftover” money is called “discretionary” funds.
You can use discretionary money to save, invest, or treat yourself.
When it comes to where and how to create a budget, it doesn’t have to be elaborate. You can create a budget on paper, an Excel spreadsheet, or a budgeting app.
Raquel swears by the You Need A Budget (YNAB) platform.
Raquel notes that most budget platforms do a disservice by tracking your money after you’ve already spent it. With YNAB, you can easily assign your money to a line item in your budget – this way, you get an overview of your money before you spend it.
2. Take Baby Steps to Investing
OK, now we know investing is branded as one of the more daunting financial topics.
But let’s break it down. Investing isn’t always about the amount you invest; it’s about time.
The earlier you start, the more time you give your money to grow.
“Even the smallest amount of investing in your 20s can do numbers over time because that compounding interest works in our favor,” says Raquel.
Let’s be real; in your 20’s, you likely don’t have the money to invest thousands of dollars, which is why Raquel shares that it’s OK to start by putting $20, $50, or $100 into a brokerage account.
This mindset also applies to your 401K. Investing enough to reach your company’s match is important because that’s free money that will add up over time. And baby, we love free money.
3. Pump the Breaks before Taking Social Media Advice
We’ve all seen it. The finance influencers or “F-influencers” that tell us the best, easiest, or fastest way to build wealth.
They encourage us to take out a life insurance policy, invest in Crypto, or try the (X) method to generate passive income. Before we take their word as bond, we have to filter what applies to us.
“Don’t get me wrong, I love that there’s so much financial knowledge at our fingertips,” Raquel continues, “That being said, you have to filter that information based on your unique financial situation.”
F-influencers are just that; they’re content creators whose goal is to capture your attention and keep you engaged in their content.
No shade to the F-influencers out there.
“A lot of the time, they’re making generalizations that aren’t always accurate, and there’s usually more to the story than what that influencer shares in a 15-30 second clip.”
Their advice may or may not apply to you. “Let the social media advice plant the seed for you to do more research instead of immediately doing as they say,” Raquel says.