15 Ways To Be Smart With Money In Your 20s


15 ways to be smart with money in your 20s

Ever wondered why you are constantly in need of money?

Though it comes to you, it ends up going into oblivion in the blink of an eye. And although you have tried your best to save up the little you can, you still end up spending it on that expensive shoe or cloth you see on display.

Maybe you used to belong to the clique of people who say in their heart “what’s the use of money when you can’t spend it?” or “spend it while you can, you only live once!”. But now, you have realized the importance of being smart with money.

Whatever your situation is, don’t be a Mr or Miss “the sea never goes dry” when spending because, in the absence of rain or presence of drought, even the sea will experience a reduction in water level or dry out.

In your early 20s, you’re most likely carefree about the way you spend money and without major worries.  This is usually the case if you’re from a well-to-do or high-income family.

Nevertheless, you should still be prudent with money for the sake of your future. If you can get it right at this stage, you will likely not have financial issues throughout your lifetime. Marriage problems that arise from financial strain will also not be your experience.

There are ways to be smart with money in your 20s even when you are not financially buoyant. What are the various ways to achieve that? Let us get right to it.


1. Wants or needs, know the difference

Let me start with an illustration:

Imagine yourself outside on a hot sunny day, thirsty, sweaty and needing something refreshing. Suddenly, two passers-by offer you ice cream and water respectively.

If you go for the one selling ice cream, the satisfaction and taste will be short-lived and you will thirst again. But if you go for water, you will drink to your satisfaction, pour some on your head to wash off your sweat, and feel refreshed.

Using this illustration, the ice cream is the want, while the water is the need – what you really need.

Wants tend to create a short-lived satisfaction that intoxicates and leaves you wanting more. Therefore, you spend more getting it, while your real needs will give you a long-lasting feeling of satisfaction.

I know that it is a great feeling to watch a blockbuster movie in the cinema, but then again after 2 or 3 months, it becomes available for download for far less than what it will cost you to buy a movie ticket and popcorn.

The ability to differentiate what you want from what you really need can help you to be smart with money.

If you need a car to drive to work when it is just a walking distance away from your residence, considering the cost of maintenance and fueling, do you really think you need it?

Before you buy that new shoe or cloth, ensure there are absolutely no alternatives already existing and tucked away in your wardrobe?

These examples are likely what you tend to channel your finances into which you may not really need.

2. Save! Save!! and Save!!!

I wanted this to be at the top of the list, but I felt you should identify your real needs first. So, let us proceed.

There is a kind of money that young adults tend to earn outside their sources of income, sometimes without even breaking a sweat. This is usually called “free money” and such can be quickly spent rather than kept because it doesn’t affect the overall finances.

If you find yourself in such a situation and you don’t have an urgent need that needs to be met, how about you save it in a piggy bank for a future need? Doing so can drastically reduce the financial burden on your source of income.

Modern technology has made saving quite simple. There are lots of investment apps being offered by several microfinance banks irrespective of the bank you use. These apps are usually safe and secure.

All you need to do is download and register to own an account. Then link a debit card with it, choose the amount you want to be saving, the time you want to save and let the app do the rest while some interest is added to your saved amount. An example is piggyvest.

3. Develop price negotiating skills

This is one skill everyone that buys things from the market should have. There is always the lowest/last price for the sale of any item. Having excess money to spend on an item doesn’t mean you should spend it on that item because you can afford it.

Most sellers in the market are waiting to make excess profit from unsuspecting buyers with overprized items. If you aren’t careful, you can have about 10-50% loss on the purchase of the item.

If you can’t negotiate well, get someone who can to accompany you. There are also online merchants or market like Jumia or Aliexpress that you can buy from, sometimes at the real prices. The only caveat is the time it will take to get delivered and the shipping fee.

4. Organize your budget

When spending, you will definitely need a budget. Your budget should be segmented into wants and need. You can also learn and practise how to make a monthly budget. On the need segment, it should be also segmented into urgent need and future need.

For example, you could list renting an apartment as an urgent need because you got a job in a new location.

Other urgent needs that may follow are a bed, furniture, cooking utensils and work clothing. Should you decide to get electronic sets, that should be in your future needs.

With a budget, you can be smart with your money and you wouldn’t have to spend more on something you can still do without. You will also have a substantial amount of money saved.

5. Patronize second-hand or lightly used wears

There are markets dedicated to the sale of fairly used or second-hand clothes and shoes, some of which may be of good quality. The great thing is some of them may not require a tailor or cobbler to fix them to your exact size.

They come in cheaper prices and better than what you might get on a normal day. Wearing such clothes and shoes doesn’t make you less different from someone putting on brand new clothes. Just have your goals in mind.

With a good maintenance culture and laundry work, nobody will be able to tell the difference and you can save a lot of money.

6. Spend less on internet data subscription

If you are in your 20s in the 21st century, there is a vast array of information on the internet flying up and down. Your data subscription gives you access to the internet which in turn gives you access to that information.

This is a little bit tricky to explain, but once you understand it, you will see it makes perfect sense. Data subscription is like the internet currency you spend to assess this information, and the currency is synonymous with money.

If every information you find online aren’t that useful or adding value to you, you are simply wasting your money assessing them. Again, I will be making reference to wants and needs.

You want to know what is happening in Big Brother Africa or the latest trend on twitter. You also need to stay informed on other topics like sport, global news and politics and how to make money online and taking online courses.

Wants and needs are relative to an individual but you should spend less time and data on what doesn’t count. It is also important for you to know that some data-hungry apps you download have lite versions that can help you manage your data. For example, Facebook lite, twitter lite, opera mini web browser etc.

7. Know your assets and liabilities

You should be able to know the things you own that tend to add value to you without huge maintenance and others that create little value but require more money to maintain.

For example, as a social media influencer or a blogger, internet subscription will be a must-have because you constantly need to be online and you also earn from your online presence and activities.

However, if you only use Instagram to look at photos of celebrities, then it is a liability to you and you will spend a lot of data refreshing different pages and trying to keep up.

This example can be adopted in other areas of your life too.

8. Invest wisely

In this age and time, there has been a boom in cryptocurrencies (Bitcoin, Ethereum), forex trading, and pyramid multi-level marketing due to the global economic crises, the prevalence of poverty and loss of jobs.

As a result, people are constantly on the lookout for get-rich-quick schemes without proper investigation.

As a smart youth, you should be able to invest in what is legal and profitable. Examples are affiliate marketing platforms such as Learnoflix and 7DC. However, you need to learn more about them from a coach for you to be able to succeed on these platforms.

Other examples that are worth noting are stocks trading, bond trading, mutual funds. You aren’t also too young to own a business or properties whose value increases over time.

9. Don’t rely on that job

If you are working and earning a salary, congratulations! But it won’t last forever except it’s yours. You might also be happy with your job now but there is no guarantee that things will always be the same.

You need to diversify yourself by having side jobs that you can do alongside your job. What most people term as “side hustle” will earn you extra income that may be able to cater for your minor wants and needs.

Such side jobs might just be training people in a skill that you can do perfectly. Examples are teaching extra classes to high school or university students on a course you are really good at or farming (fish farming, agriculture and poultry).

An economist would say that human wants are insatiable but you could really become smart with your finances by having multiple streams of income.

10. It wouldn’t hurt to do it yourself

You can learn some amazing life hacks in your home by transforming waste into something useful. As a wise person, you wouldn’t have to buy a lot of things from the market. You could also learn to paint walls, patch a torn clothing, change a switch or fix a wall socket.

Learn anything that will prevent you from hiring someone fix for you. You could also reduce your patronage of fast foods and restaurants and learn to cook your amazing dishes to eat every day. This will save you a lot of money and time cooking because you could easily store and refrigerate the excess for later use and you can eat to your satisfaction.

If you don’t have a refrigerator, you could cook the quantity you can finish or microwave the excess so it doesn’t lose its nutritive value.

11. Don’t pile up bills or debts

Bills are just another form of debt you have to pay, especially if you live in a rented apartment and you can incur a lot of them if you’re not careful.

Such bills could be rent, electricity, water, internet and cable bills. You will be smart if you choose to spend your money on the bills that are most important which are often the rent and electricity bill.

Other bills like the cable bill could be limited if you work 5 days a week and only get to use them on weekends. You could also limit your data subscription and use power-saving electrical appliances to cut down on your electricity usage.

12. You don’t always need that upgrade

These days, most youths are always looking for the next big thing majorly in fashion and technology. The most prominent one being smartphones, gaming system and computers. Using an iPhone as a case study, your iPhone 7 or X of later years can perform the same function as iPhone 11 or 12.

These companies push their latest Operating System updates to their phones so that you can still enjoy the same new features on the old device.  This means you really don’t need to upgrade for the sake of new features.

The smartphone world is dynamic and keeps evolving. You will always need to change your phones but ensure you are changing it as a result of something more serious like irreparable damage or other hitches.

One thing about these devices is that they are very expensive in countries with higher exchange rates.

13. Be your own accountant

This is very simple. You can learn a little bit of financial planning so that you don’t spend outside what is listed on your financial plan. Budget anything you need appropriately and ensure everything you spend on is accounted for so that you don’t run at a loss.

A step further will be keeping all records of receipts and invoices of purchases that you made. This can be used to prepare your financial record. In doing so, you will be smart with money and won’t be wondering what you have been spending money on.

14. Old or no longer useful, sell it

Most items found in second-hand shops belonged to people who no longer needed them.

You can as well do the same for things you no longer need in your apartment. Doing so can make you have a little bit of change to meet a need or save up for a future need.

You can swap or sell that smartphone for a new one if you need to. The major benefit of selling unused item is the space you will create in your residence and the money you can save up from sales.

15. Do not live above your income

This is very important if you need to be smart with money. Every point that has been written so far is an aspect of money management.

A simple life devoid of all the flashiness and excess luxury is easily maintained because no one will question you.

Bottom line

Whatever level of finances you belong to, whether low, medium or high-income earners, you can always be smart with money.

You need to pay your bills on time, lend more instead of borrowing, avoid debts, operate multiple streams of income if you can, have some money saved up for emergencies, invest in cryptocurrency trading if you want to and do not live above your finances.

Learning about money and developing your financial management skills in your 20s can lead you towards having financial freedom.

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