Comments on: Financial Focus In Your 20s – Part 2

By: DonCarlos

DonCarlos — Mon, 22 Mar 2010 14:18:19 +0000

I graduated from university at 23 with no student debt, having worked 4 jobs to do so. My future wife had about $45K in student debt. We paid it off in about two years by living frugally – we only made about a combined $60K at the time, and lived in Toronto. We shared an apartment with some friends of ours and put every extra dime into paying off those debts. We also began saving for a condo of our own at the same time.

Now that we’re in our early 30s and have two kids, we make better money now than we did, but it was that early saving and sacrifice that paved the way for the quality of life we’re enjoying now. And we haven’t forgotten our good habits – we’re on pace to have our mortgage paid off and be debt-free forever in 5 years.

By: Superbad Advice

Superbad Advice — Thu, 18 Mar 2010 02:29:59 +0000

Love this series and look forward to more. Just to give people motivation, my wife and I put about $3,000/month against our non-mortgage debt after we finished school as we were used to living like students, and then both had good jobs. Debt disappeared and we were so used to living frugally, but not for want, that our net worth was well into the 7 figures by 30. Neither of us made more than $45,000 until we were 30.

Gail is right, it’s your perspective you have to change.

By: Jane

Jane — Wed, 17 Mar 2010 18:13:12 +0000

@Ronnie, I’m just wondering how it is possible to have that much in student loans? Are you in the US, & was it a private university or something? I can not IMAGINE trying to pay off what is essentially a home mortgage in student loans.

By: Ronnie

Ronnie — Wed, 17 Mar 2010 16:03:13 +0000

Such tiny student loan debts!! Not to you who are paying them, of course, but I would KILL for such small loans. I turned 30 6 months ago, and I’ve paid off $25,000 in student loans. I have another….ahem…$187,000 to go! I’m on a pretty tight 10 year plan to pay them off, but that doesn’t include my honey’s…ahem…ahem…$278,000 in student loans! Combined, we’re working on a 15 year plan for both, but we’ll be in our mid-40s when they’re done. Still much better than our 60s!

I’m paying off the last of my consumer debt and car loan this year, and then can really begin focusing on my loans. Right now the interest rates are so low, but half of my loans are private, which means when the Fed starts raising rates, I’m in trouble. Trying to get ahead of the curve now. Congrats to all of you who didn’t make my mistake, and best of luck as you move forward !

By: Johanna

Johanna — Wed, 17 Mar 2010 09:15:34 +0000

I wish I had Gail’s great advice when I graduated high school. I am 25 now, and finally have a full understanding of the importance of being frugal. I try to shop on Craigslist when I might need furniture or a book for school, instead of buy new and digging myself into an impossible hole. I think they should teach this to Seniors in high school or College Freshman.

By: larissa

larissa — Wed, 17 Mar 2010 00:03:37 +0000

@Monkey…Let people you know, know that you will be getting your own place soon. You’d be surprised how many people will load you up with gently used stuff for you new home. Not everyone enjoys holding garage sales and like knowing that their old things are in a good home.
I received some of my nicest stuff from co-workers who were moving, spring cleaning, getting nicer things, etc. I really didn’t want a roomie after sharing with either a sister or roomie at University. If you look around, you should find something that fits your budget…even if it means your bedroom is in the one open space in the suite. Don’t be worried…this should be a fun time in life. And it doesn’t have to be expensive.

By: Emma

Emma — Tue, 16 Mar 2010 20:53:46 +0000

Monkey, I’m 25, and have been living away from home since 18 (started with res, moved onto apartments).

I completely agree with Kat – mention you need some things, and see what you can take with you. Your parents might assume you’re taking you’re bedroom furniture (mine did, when I finally moved out – though my twin bed was moved to a spare room, and I took the double bed from there). I was able to get things from family (toaster, microwave, etc) as birthday/Christmas gifts.

Rent – if you can get a roommate, your rent costs will drop, and it will also give you reduced fees for Internet, phone, cable. In my first apartment, I was in a basement, and got all that included from my landlord, but that can vary with every place.

By: Kat

Kat — Tue, 16 Mar 2010 19:15:37 +0000

@Monkey Yes, begin pricing out what you absolutely *need* to have to function in an apartment, and don’t get caught up in what you would *like* to have. ie the walls don’t *have* to be painted, you don’t need a whole set of dishes, you can pick up some cheap things at Value Village. One of the biggest mistakes I made when I was out on my own, was putting on credit, things I thought I had to have.

Create a budget for what you would like, and ask around – go to garage sales. I bought a toaster for $5 that worked for 4 years at a garage sale. Maybe somebody has an extra iron, extra pot.

Also, alot of apartments you don’t have to pay utilities, I would definately recommend that. Utilities can be a killer expense in the winter — I remember when I paid utilities on an apartment, I rarely had the heat on, I would have my clothes, and artic fleece robe, and a blanket…

By: SimpleSavings

SimpleSavings — Tue, 16 Mar 2010 19:12:03 +0000

Ah, the innocence of the young… Me I mean… I was 19 when I started my career and I’m 38 now. Included in my job was lodgings, meals and even clothes! My pension was deducted automatically so my savings were looked after for me as well. The only thing I had to pay for was eating out, regular clothes, smokes (thank god I gave that up!) and booze. Life was good! No bank would give me a credit card – I tried – so I couldn’t get into debt.

Then life changed. As I moved towards my 30s I found love – he loved spending money he hadn’t earned yet and I followed suit – bought a house, had my daughter, was granted gold and platinum cards and even a $120,000 LOC!

Now it’s just my daughter and I. We’re living well within our means and happy! There were no Gails back then but luckily she’s here now. So all you 20somethings with the easy access to credit that I never did, watch your bottom line and live life the Gail way. You’ll be happier for it

By: Monkey

Monkey — Tue, 16 Mar 2010 18:39:13 +0000

I’m 23 and graduating from my second university degree in May. I’ve been working full time for the last 2 years to pay off the loans that started accumulating during my schooling, and now everything is completely paid off. I’m working on building a nest egg that should be about $5000 by May.

However, I’ve been able to pay off my debts aggressively and start saving because I have been living with my parents during university. They are kicking me out when I graduate, and I am very nervous about my ability to save and not go into debt when I have to pay rent, utilities, etc. Does anyone have any advice?

By: Kelly

Kelly — Tue, 16 Mar 2010 18:15:39 +0000

I graduated from university with 14000 in student loans. It took me 4 years to pay it off, but it was worth every penny. Also, the good thing is that when you are done paying, you can just take the loan payment and put it toward retirement savings, since you have already been living without it for so long! I took a two month vacation in between doing that and used the money for a few ‘treats’ as a reward for paying it all off! Like Gail says…you gotta have some fun in there too and I think a little spending after working hard to get your student loans payed is well deserved…espeically when many people I knew were just defaulting…

By: Steph

Steph — Tue, 16 Mar 2010 17:50:08 +0000

I found the best way to save is to set automatic transfers from my accounts on payday. When my paycheque comes into my chequing account each Monday I automatically contribute $120 to my RRSPs and $50 to go towards my yearly vacations along with $50 to go towards my car fund for when I want to buy a new one.

If you allow the money to sit in your account you will find things to spend it on! By transferring it out automatically it makes you think you don’t actually make as much money and thus limits your spending!

By: Rebecca

Rebecca — Tue, 16 Mar 2010 16:31:00 +0000

I’m following #1-3 pretty well so far (at age 23), although I could always be saving more!

By: *pol

*pol — Tue, 16 Mar 2010 16:22:50 +0000

That’s interesting, I have never thought of SAVING as deciding NOT to spend…. I always had it framed in my mind as a decision to put “now” money away in my future life account — the long term savings/planned expenses…. in other words paying myself first. Since the money is taken out of my monthly disposable income it is “spent” to me….

Those ads that highlight how much money is “saved” during discount sales burn me. If you are spending the cash to buy it you are NOT saving 50%, you are just spending 50% less than you would have if you bought it last week. Don’t be fooled.

By: Amanda

Amanda — Tue, 16 Mar 2010 15:38:03 +0000

I am an avid Gail follower. I watch her show and read her blog all the time. She has been an inspiration to me in turning my life around. I am 25 and am currently working along side with my fiance to pay down our student debt which totals about 38000, builing an emergency fund, saving for a down payment and saving for our wedding. I wish that in my early twenties and late teens I had had the knowledge and wisdom that Gail has given me. My parents have never been good with their money they tried their best but they are constantly living pay cheque to pay cheque. I found myself doing the same thing as soon as I began making my own money. I acted like the Princesses on Gail’s new show buying things I couldn’t afford on LOC’s or CC’s. I am now finally seeing the bigger picture. I don’t need those things to make me happy I can get my finanacial life back together and build for a more secure tomorrow. I look forward to rest of this series.