Recently, I read Elite Daily’s article If You Have Savings In Your 20s, You’re Doing Something Wrong.
There are so many things wrong with this article. The author in this article basically says that you should spend all of your money in your 20s, even if you have money to start saving in your 20s. Saving money in your 20s to her means that you are boring, lazy, and just planning for your death.
To state the obvious: I disagree with her article.
I believe that saving money in your 20s means you’re doing something RIGHT.
There are tons of horrible advice in her article such as:
What memorable experience does money in the bank give you? How well-rounded can people become sitting at home, watching their limited funds gain interest?
As well as…
When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved. You’re going to be full of regret.
I read this article over and over again to see where the author would say “Gotcha, April Fools!” However, that never happens. I’m sure this article is mainly just click bait to get people to head on over to their website. I think the advice is horrible and I’m hoping no one is following the advice of this author. However, I’m sure at least a few people are taking her seriously…
There are so many reasons to start saving money as early as you can. I don’t think I’ve ever heard someone say “I regret all that money I saved when I was younger.”
In fact, it’s usually the exact opposite.
Considering the fact that 36% of people in the United States have absolutely NO MONEY saved for retirement (according to a survey done by Bankrate), I think there are many who probably wish they had savings.
There is absolutely no reason to spend all of your money just because you want to. It doesn’t make any sense to me to blindly spend everything just because it’s there!
Below are several reasons for why you should start saving money in your 20s.
You can learn good habits now.
One of the top reasons for why many don’t save and invest is because they claim that they don’t know how. Yes, the beginning of saving money and investing may feel like a whole new thing, but it is possible and it doesn’t have to be hard.
The sooner you start saving, the more it becomes more of a habit and the easier it will become. By saving money in your 20s, you will learn good financial habits that will help you well into the future.
Related articles:
- 5 Mistakes That Can Hurt Your Chances For Retirement
- The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!
- The Smart Woman’s Guide To Investing Success
- How To Save Money – My Best Money Saving Tips
Leading a good life doesn’t have to make you broke.
As you all know, I really dislike the myth that people who save money are boring. That’s just not true at all.
There is absolutely no reason to go broke and spend all of your money in order to have a good time. I believe that you CAN balance living a good life along with saving money in your 20s.
There are plenty of ways to live an awesome life while saving money. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more, all while staying on a realistic budget.
Related article: How To Have Frugal Fun
Compound interest is a powerful thing.
Saving in your 20s is a wonderful thing, especially due to the fact that time is on your side and due to the powerful impact of compound interest.
Compound interest is one BIG reason for why you should start saving money as early as you can (especially for why you should start saving in your 20s).
Compound interest is when your interest is earning interest. This can then turn the amount of money you have saved into a much larger amount years later.
Side note: I recommend you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is similar to Mint.com, but much better. Personal Capital is free and it allows you to aggregate your financial accounts so that you can easily see your whole financial situation, including investments.
Just because you don’t have “wants” doesn’t mean you won’t have “needs.”
One thing the author said in her article was that she doesn’t save money because she has no “wants” in life.
This is a horrible thing to say as you may have NEEDS that pop up that require savings. You never know if you may have a medical emergency, if you may lose your job, if your car may break, and so on. Having savings can help get you through hard times.
Plus, you never know how things may be in the future. Just because you don’t want to start saving money in your 20s now doesn’t mean that you won’t want to save later. You will most likely regret your past if you make the huge mistake of choosing not to save money.
Why not start saving money in your 20s if you can?
Saving money in your 20s is better than not saving anything.
What is the reasoning behind spending money just because you can? I see no point in actively trying to make sure you don’t have money leftover.
Like I said earlier, there is no reason to spend all of your money just because you are able to. It doesn’t make any sense to me to blindly spend everything just because it’s there. In my opinion, saving money in your 20s is always a great idea.
Even if you are only able to save a small amount, that is much better than not saving anything. Remember, time and compound interest are both on your side and this can turn the small amount of money you have saved into a much larger amount.
To summarize this whole post: You should start saving in your 20s if you have the ability to.
Are you saving money? Why or why not? What do you think of the Elite Daily article?
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Believe it or not, I have read this advice in so many places. And I still can’t believe it!
Learning how to save early on is one of the best things you can do for your financial future, and it doesn’t mean you’re sitting around rotting away. You can learn how to save and still have rich experiences in your twenties!
Yes!
It’s so sad that so many young people don’t understand the power of compound interest. This is something that should be taught in schools.
Yes, I agree!
Yes, that’s why this article is such a problem. I’m sure many people read that article and thought “Okay, so I’m fine then!” AHHHH
I love this post! As a barely 23 year old (my birthday was two days ago, haha) it seems INSANE to me that people wouldn’t save in their twenties. I’m currently living on 50% of my income and enjoying the exact same lifestyle as most of friends. With a few barely noticeable tweaks (no car, only eating out on special occasions, hacking beauty and fashion, etc.) I’m able to live what I consider a ridiculously luxurious lifestyle while also working towards my future goals/freedom. I think the key is to stay in the college mindset of being “poor” even after graduation and never succumb to the dreaded lifestyle inflation 😉 Thanks for sharing your wisdom!
Happy birthday Taylor! Great job on saving 50%!
I’m in my early twenties and I don’t ever remember a time when I wasn’t trying to save money. I was that kid who put away their birthday money in a bank account rather than go buy something right away. My parents taught me that savings were important and so I’ve remembered that and tried to save my whole life. My husband and I have tried to save, but as you said things come up. Every time we’ve had some surprise expense, we’ve always had our savings to help us out. If we didn’t have those savings, I know we would be in a world of hurt. I can’t imagine not saving, especially on purpose. It’s just crazy to me! And I agree that saving money doesn’t make you boring!
Yes, it’s just crazy!
I am now 26 years old and still not that serious with regard to saving money. But, I am trying to save as much as I can even though I am still paying my student loan. It is really hard to prioritize saving. I think after paying it off, I’d be committed to saving so that I can keep with the years lost.
Sounds like you are serious to me 🙂
I was seriously baffled by that article when I read it. Unfortunately, I know quite a few people who live by her advice and approach. They will say, “you can’t take money with you when you go” or “you only live once.”
I by no means think you should save every penny without any intention of spending it. But you should spend purposefully, just like you should save purposefully. Having goals, a plan and an approach can be incredibly empowering and meaningful. When you decide why you are spending or saving, you are in control, regardless of the income amount you are earning.
Rather than just saying, “save” or “spend” people really should focus on having a plan and knowing why they are doing what they are doing.
Yes, having a plan is important.
Saving money at ANY age can be beneficial. Thank you for this post and inspiring all ages to start saving now or to continue saving.
I wish I would have read an article like this in my early twenties just for the knowledge of compound interest.
Thanks! 🙂
I quit reading her article half-way through. Total click and bait.
I live within my means and I don’t deprive myself. There are a lot of fun things that are low-cost or free such as going on hikes, going to the zoo, going to parks, going to museums, going to the library and community events, etc.
I also am subscribed to 4 monthly subscription boxes, memberships to Hulu, Netflix, Audible, Amazon Prime Student, and 2 magazine subscriptions. I have a spending plan (budget) and plan out everything I need/want for the month.
I’m not rich either, I’m a student at a state uni. and I make it work! ^_^
P.S. I listen to Dave Ramsey’s show and he has many families that are making average incomes from $30,000-50,000 and they’ll have like $32,000 in savings, paid off their debts including student loans, and are saving for their children’s college funds, etc.
You can have excuses or you can have results. I’d rather work smart and have results.
Yes, I’d rather work smart and have results.
Great job Lila!
Great advice, in my personal opinion is never too early to start to think about finance, maybe schools would must introduce calsses to teach it!!
Wow. It sounds like that article was written entirely as click bait, as you first commenter has suggested. Absolutely ridiculous! What annoys me the most is the ‘all or nothing’ approach that is suggested. No one said that you had to save every spare bit of money that you have, but saving in your 20s is going to give you a huge financial headstart. As you said, compounding is a wonderful thing- even better if you can get a 10 year headstart on it 🙂
I agree with you entirely on this. I, personally, am 26, and I am trying to balance everything in my life- with some success. I save a bit, I have a couple of properties as investments, and I get out there and travel…..on the cheap. None of it is easy, but it can be done. Life in your 20s doesn’t have to be either reckless or boring, why not try the best of both?!
Thanks for sharing this post, it was really interesting for me.
Reece
I agree with you 100%. I can’t believe someone would give that kind of advice! I feel like people in their 20s are much less likely to have stable careers than people who are older, which is all the more reason to save. I’m relatively new to the PF blogging world, wanted to drop by and say hi! Great post.
I saw that article and truly hoped that it was a “statement piece” to get people talking because it really struck me as nothing but crazy. I started saving in my early twenties and although I didn’t save exactly where and how much I should have, those savings have allowed me to pursue the passion I discovered in my 30s. I didn’t even know what it meant to be passionate about work in my 20s and if I didn’t save when I did, I would miss out on the joy I’m experiencing now of pursuing what I love.
Yeah, I’m not sure either. If it was to just get people talking, I wouldn’t want to attach my face and bio to that article haha!
I agree, it is never too early to start saving money. While this article encourages saving which in your 20s, I know there are lots of parents who setup saving accounts for their teenagers, and sometimes even children younger than that. I love that idea. One, because it really is never too early to build assets for your children. Two, the earlier you teach your children about frugality, the better money managers they will become as soon as they are old enough to own a credit card, which is at a pretty young age!
Yes, definitely!
The suggestion that saving money in your 20s is a bad idea seems ridiculous to me. I get the point that they are trying to make; you should enjoy your fleeting 20s. The problem with their thesis is the suggestion that you need to spend every last dime in pursuit of that. There seems to be this myth that you don’t need to take your finances seriously until your 30s. People following that advice are likely to find that their 30s are spent with high-interest debt, a lousy credit score, and denied loans. Unfortunately, this is just around the time people start thinking about starting a family and buy a home. Both of those goals will be difficult without fiscal fitness.
Yes!