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20 Financial Milestones for your 20s

I saw Thousandaire’s 20 Financial Milestones for your 20s that all started at Gen Y Wealth and couldn’t resist.

Here’s how I stack up at age 28:

#1 – Finance a dream vacation…in cash Mr. BFS and I take at least one big trip every year and always pay for it in cash.  Last summer we took our second cruise (we went snorkeling in Jamaica and Grand Cayman and loved the lazy rivers in Mexico).  This coming summer we’re heading back to Las Vegas for a week.  These may not sound like “dream vacations” to everyone, but I’ve already lived in other countries and Mr. BFS is a homebody, so these are our dreams, lol.

#2 – Pay off your private student loans We didn’t have any college loans.  My husband’s parents covered his education and my parents covered whatever my scholarships and 3 part-time jobs didn’t.  I also lived cheaply in college overall.  We were/are blessed.  We know.  🙂

#3 – Automate paying your credit card bill in full We automate as much as possible in every aspect of our financial lives, lol.  We got this covered.

#4 – Get Rid of Bad Debt  The only debt we have left is our mortgage since I love paying off debt.  I nearly went nuts when we paid off our last car.  I think all debt is cruddy, but I doubt home debt is considered “bad debt” in this respect.  It’ll be paid off no later than my 33rd birthday though.

#5 – Build an adequate emergency fund We have 6 months of our expenses in cash in our ING emergency fund.  Our 401(k), Roth IRA, and Scottrade stock investments would cover us for an additional 2 years at least.

#6 – Make your first, and last, investment mistake We invested $15,000 in a “friend’s” business and ended up losing almost everything.  I’m sure we will buy a bad stock once in a while in the rest of our history in the market, but I doubt we’ll ever make the same huge mistakes again.  I just don’t think it is a good idea to think you will never fail again.

#7 – Develop a statement of cash flows We operate on a zero-based budget, so we know where all of our money goes.

#8 & 9 Max out a Roth & Contribute to your 401(k) We have fully funded a Roth IRA for 3 years now and have always contributed at least the minimum to get the maximum company match to my 401(k).  We are currently trying to fully fund a second Roth IRA for 2010 – we have until April to come up with another $3500, so I think we’ll make it.

#10 – Get a degree or certification that increases your earning power I graduated Cum Laude with my bachelor’s degree and my husband not only received his bachelor’s but completed his graduate degree last year in order to become a school librarian.

#11 – Take a career risk We invested the $15,000 into a failing business so we could turn a game store into our main job.  That obviously didn’t work out, lol.  I’m now attempting to turn blogging into my full time job by the time I’m 29-30.

#12 – Negotiate something We bought our home as a foreclosure and talked their already low price of $119,500 to $114,000 in 2007 before the crash.  You can also check out how I got hubby’s Prius.  Finally, I also regularly negotiate down the price of all our souvenirs, art, and any furniture we buy and have to negotiate with advertisers for space here on BFS.  I LOVE NEGOTIATING.

#13 – Earn your first side grand I earned about $5000 in 2010 from blogging and another $1000 with side jobs and freelance writing.  My husband earns $3000-$5000 a year reffing high school and middle school football and basketball as well.

#14 – Start a sub-savings account for an upcoming financial goal We have multiple accounts for everything, lol.  Our most loved one is probably our vacation account.  🙂

#15 – Set a target retirement date 52.  That is when my husband is eligible for his full pension and we are saving like crazy to make it happen.

#16 – Monitor your credit I monitor all bills and expenses and check each of our credit reports every 4-6 months.

#17 – Say no to a financial salesman We say no to a ton of stuff.  That is how we are hoping to afford early retirement.  🙂

#18 – Give just enough to make it hurt We only give a little money every year, but I donate a ton of time.  When we lived close to the Houston SPCA, I volunteered there 3 evenings a week for 4 hours after work and half of every Saturday.  When we moved, we fostered Pugs for Pughearts: Houston Pug Rescue until we adopted one and ended up spending $2500 to get Mr. Pug healthy again.  This year I’m getting involved with Meals on Wheels.

Two Milestones for the Over Achiever

#19 – Invest $1 for every $1 you spend Not quite there yet.  We live and play on my husband’s salary and invest mine, but that’s like investing 40% instead of 50%.

#20 – Start a 529 College Savings Plan Ummm…no.  My younger sister (20) earns scholarships and works summer jobs to pay her way through college for her engineering degree and my youngest sister (15) is well on the way to doing the same for whatever degree she chooses.  I have no idea if either one of them ever wants to have kids.  Plus, my parents are more than willing to help cover any extra now and probably would spoil a grandkid rotten, lol.  My husband is an only child and doesn’t even have any first cousins.  We have no plans to have children thus far.  So this would be a big, fat no.

Grand Total

Of the 20 Goals, here is where I stand: 16 – Completed 3 – We will voluntarily not try to reach these goals (#6, #18, and #20) 1 – Working on it (#19)

How does it/did it look on your end?

Alright millennials - how do you stack up versus me? What quiz score do you get on these 20 financial milestones for your 20s? I did not bad, but there's still room for improvement. Managing money well in your 20s makes a HUGE difference later on in life. These money milestones are key.

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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35 thoughts on “20 Financial Milestones for your 20s

  1. Nice job completing 16 of the 20! I didn’t really count it up, but I think I have done 4 or 5 of these. My wife and I are still young, but we’ll get to many of these things very soon!

  2. My life was so much simpler when I was in my twenties! I had a credit card that had a max credit line of $500 that I got when I was 27, my only debt was a small student loan, I had no cell phone or computer. My only overhead was my junk of a car (that I bought for $150) and rent.
    I know things have not changed that much in 20yrs. I had friends that had big corporate jobs, fancy cars, health insurance and all the things I had not grown to know. In many ways I was immature- I had few responsibilities!

  3. Great job. I just recently went through this list, and did decently well too. You’re lucky about having no student loans! Sounds like you guys are really doing well when it comes to accomplishing your goals, that’s for sure.

  4. @LifeAndMyFinances, good luck!!!

    @Molly on Money, I didn’t have many responsibilities either until I took on blogging and decided to turn it into a 2nd job…oh well, at least it’s all fun!

    @Jonathan, thank you. I’m glad you did so well too!

    @Little House, I don’t know why, but I always thought you were in your early thirties. 🙂

    @Kevin, it was a fun list! I’m not sure if we’ll ever save all 50% or not…I think 30-40% is okay, lol. 🙂

  5. Nice! You are so much ahead of a lot of people I know. I love vacations and travel. Never been on a cruise. We are contemplating it… One day! I would never invest or borrow to a friend unless I have a lot of money to lose (and still would consider gambling instead.) I know… I can be a mean friend. 🙂

  6. Let’s see: 11.5 / 18
    #1 – Finance a dream vacation…in cash – done.
    #2 – Pay off your student loans – done.
    #3 – Automate paying your credit card bill in full – really need to do this (2011 goal?)
    #4 – Get rid of all bad debt – done
    #5 – Build an adequate emergency fund – done
    #6 – Make your first, and last, investment mistake – I’d need something to invest in…
    #7 – Develop a statement of cash flows – definitely need to figure this one out.
    #8 & 9 Max out a Roth & Contribute to your 401(k) – almost done with 2010, need to start 2011 right after that.
    #10 – Get a degree or certification that increases your earning power – done.
    #11 – Take a career risk – done, doing Toastmaster’s to conquer my fear of public speaking.
    #12 – Negotiate something – done.
    #13 – Earn your first side grand – need to work on this more.
    #14 – Start a sub-savings account for an upcoming financial goal – done.
    #15 – Set a target retirement date – oh fun! I still need to do this…
    #16 – Monitor your credit – done and working on improving it.
    #17 – Say no to a financial salesman – done.
    #18 – Give just enough to make it hurt – done. Same with you, I donate a ton of time and should donate more money.

  7. @Jessica07, thank you!

    @Aloysa, cruises are great! I love the excursions and the time on the ship. 🙂

    @Jenna, wowza, looking good!

    @20 and Engaged, hope the next 10 years sees all of it happen for you!

    @Jeff, thanks. Good luck to you too! And yes, being married helps money-wise if you both work, I know I have that advantage. 🙂

    @MoneyCone, thank you!

  8. @Money Reasons, LOL. If I created the list, I’d have hit all 20. 🙂 Thanks about my house! Prices in Houston are lowish to begin with, but we did get lucky!

    @Nicole, you’re not old. Congrats on keeping ahead!

    @Mark, yes it is. We’ll see if we ever do it…

    @Amanda, you are very right, #18 is great for the soul!

  9. Great tips! I’vs just read this list, and did decently well too. You’re lucky about having no student loans! Sounds like you guys are really doing well when it comes to accomplishing your goals, that’s for sure. My number one financial goal in my twenties was to buy a house. I know that goal isn’t for everyone, but I’m sure glad I did it. If I hadn’t started saving when I was 21, I would probably still be renting. Instead, I am five or six years away from paying off my mortgage.

  10. I’d add a common twenty year old’s mistake: avoid buying a new car that you can’t afford. Ideally, use the same technique as in number 1 and buy your car, the one you really can afford (which will very likely differ from the one you desire) in cash. I think most of us get stuck paying for a new car and sacrificing great saving power in order to get that dream car far too early.

  11. Well past my 20s, but excellent information for sure! I’ve always tried to not exceed having around $5k in debt. It can be a trap given it grows to high!

  12. A good milestone for consumers, would be to avoid debt all together!! credit card debt is very difficult to pay off, especially in your 20s.

  13. Completing milestones in your 20s can be extremely hard, I know. I like # 16 the best. It’s important to monitor your credit and keep tabs on everything imo.

  14. Twenty somethings will likely change jobs every few years. Never hesitate to take a better job but always do good work and leave the old job on a positive note. My oldest son, at age 34, has now worked for four different employers. Every job move was a step up. Interestingly, he currently is in a position that several of his old employers are now coming to him to bid on jobs. His business network includes most of his past employers, contractors and the up and coming engineers he has worked with. In the past couple years several of his past employers have approached him with offers to return and manage entire divisions. He has even gotten job applications from some of them that want to come and work for him.

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