Like many young people who are living in their 20s, I used to make a lot of financial mistakes about spending money in my 20s (and it still keeps going but it to be more controlled when I get a better understanding about finance and how to be smart with my money).

At the early of 20s, I did not understand the real value of money. The budget in my early 20s is spent based on my feelings. So, I just love to spend money as much as I want, such as buying new clothes every month or whenever I feel bored. And I never have my own savings and investing. 

And either to consider how much money I used per month as well as thinking about personal finance learning. It sounds so crazy, right!!! This is when I study in the University and all money is to be supported by my parents (as Asian Style: Parents support money, children use it and just need to enjoy the University life).

However, after I graduated, everything changed. I don’t allow myself to ask for financial support from parents (as well as they are olders and need to save money for their retirements as well) and start to learn how to be smart with money. 

So when you from the point that be supported several thousands dollars a month to be “Zero”, and don’t know how to manage your money in 20s, it is a really tough time for beginning and ask me to self-control and learning a lot of financial lessons about how to use money wisely and savings. This is the time that I recognized how silly I am to spend a lot of money in the past just depending on my moods (No logic, No excuse, Just Spending!!!). 

So, after a while, I self learn a lot of things and start to change myself step-by-step. And there are many lessons that super values that I learned during my tough time about personal finance. 

So, this blog will show you some very important financial lessons that I learned and played a significant role in changing my financial life and give me more financial freedom. I wish you knew earlier at the beginning of 20s, and I wish you too. So this is the reason why I want to write this blog to share with you a full understanding of these lessons and how to use it to change your financial life, and show you the best things to do in your 20s financially.

1. Having your long term rather than short term for your financial goals in your 20s.

This can be known as one of the best financial tips I would give my early 20s to invest and save my money with long term rather than short term goals. Because when you learn how to manage money in your 20s with long term financial goals, you can calm down and have careful thoughts before any financial decisions in your life to make sure that it can help you to have a sustainable financial life or not. 

With the short term goal, it can be good in some points if you try to work hard to achieve it. However, it can cause a high pressure on yourself and make you doubt about your ability when you set a high target for a short period of time. 

You will want money to be your tool to make you happy and achieve what you want to achieve in life for a long time, not to make you feel frustrated and bring mental health issues. 

So, make sure to have your short term goals that are affordable and can make you feel happy and fun when achieving it. And set high goals for the long term and focus on doing step by step investing in your 20s to achieve your big dream about financial freedom.

2. Understanding the value of Saving. 

How much money can you save each month now? Does it 5, 10 or 20% of your income or more? 

I remember one of my friends used to teach me an initial lesson about how to be smart with money: “It doesn’t matter how much you can earn, it is all about how much you can save!”. Damn, it’s true. I know many people who can earn up to thousands dollars per month in Vietnam but still live in small apartments and don’t have enough money to buy their own cars. While the others who just have around 50% of that income can buy a house, have their own car and use their money to travel at least twice a year.

Yes, it is all about saving. When the second person loves to cook at home, spending his weekend doing some extra jobs and saving money to invest in real estate and stocks. The first person who get the high salary believe that he will be rich soon with his monthly income (if you don’t know, the average salary in VN just around 800$/month ( for middle income class), he spends most of time eating outside at restaurants and normally change his hi-end devices such as new iphone, laptop every year come up. Because of these reasons, he doesn’t have any amount of money for investing, all his income based on his salary. Therefore, as a result, after 10 years, his income is still his salary but his friend’s incomes already become multiple sources of income that give him freedom to enjoy his dream life.

So, when you know your saving game and play it well, you can get anything you want. In the cases I told you, it takes these people years to see the difference (and I know them as they are my family friends).

3. Don’t Open too many Credit Cards.

If you really want to manage money in your 20s, smart and under the control, always remember this lesson. This is really stupid when you decide to open so many credit cards and use the money in advance when you can’t afford it. 

This is what I saw from my friend do when I live in Australia. (Personally I thought about it before but I never do it, especially after I know my friend’s story). My friend has around 4 credit cards that allow her to use money in advance up to 20,000 dollars (as she has a job and PR in Australia). So, she loves to spend money in advance, even if her income fluctuates, from 4k to 6k per month. 

However, after 5 and half years living in Australia, she comes up with more than 15k in debt without any savings at all. The main reason is she loves shopping, and eating outside, having parties with friends, all of them be paid by her credit cards even before she receives her monthly salary.

What do you think if you already work for 5 and half years, living on your own and still stuck in debts because of using credit cards?!

Personally, I believe that no one should be in this situation. And if you read until now, it means that you really want to control your financial situation and really serious about it. So, try to not use your credit card, except when you really need urgent money for an emergency situation.

4. Learn about personal finance.

Let’s start to learn about personal finance when you are young! The earlier you start to learn, the more money you can earn and save. There are so many courses online to teach you how to be smart with money and personal finance tips on Skillshare that you can learn for free (with your free trial for 14 days to access all the classes).

Because when you join in the class to learn financial tips from experts, it means that you already saving years of self-experience the failure from your teachers, who get real experience and share it with you (Skillshare is a platform for real people to share real lessons, it is not about academic stuffs that you learned in university!)

5. Have a budget in your 20s

Having a budget in your 20s means you start to learn and apply the lessons about controlling your money. When you start to have your own budget, you know when to spend, what to spend and how to spend your money. 

You will not use the money for unnecessary things that make you get out of your money track. When you start to establish this habit at an early age, your financial mindset and skill will improve rapidly and help you a lot in the bigger financial decisions later in your life.

6. Starting To Investing Money In Your 20s

“How to invest money?” – This is a big question for your 20s, especially when you have no investing experience before. So, let’s start to invest in yourself first. As I said before, the best and fastest way to be smart with money is learning from the expert in this field.

So when you start to understand about your personal finance (as you can find a lot on Skillshare for free 14 days trials), you start to save then you can start to invest. But if you don’t want to lose a lot of money when you invest in stocks, products or real estate, let’s invest in yourself first. Changing your mindset about money and how to work with it before risking your savings.

So these are the financial tips that I want to share with you to help you have a better understanding about how to be smart with money in your 20s.

Do you agree or disagree? Why and why not? What are the most important financial tips you would give your 20 year old self? Share your thoughts in the comments below.