8 Personal Finance Lessons Women Learn in Their 20s
Being in your 20s is amazing. It's filled with change; most women enter the decade as college students without any idea of what to do with their lives, only to end their 20s much more settled — oftentimes married, sometimes with kids, and frequently well into a career. Here are the eight financial lessons women in their 20s learn.
1. Love Has an Enormous Impact on Your Money
I entered my 20s dating the person I thought I would marry. I first moved across the country for them, and eventually to the other side of the world to Russia for that person. But by time I was 21, I was dating someone new. This time, it was the person I did marry. But going into a relationship you never really know where it is headed, and you don't know the impact it will have on your wallet. The reality is that love will impact your financial situation tremendously. It's not just about who pays for dates, but whether you share the same financial values, what type of job the other person has, whether you move or switch careers for that person. So choose your significant other wisely.
2. Take Big Risks With Your Job
Your 20s are the best time to grow in your career. In fact, a brand new study has revealed that most of your earning potential is determined in your 20s. So, it's best to find work that is meaningful and enjoyable, but that will also earn you a decent living. Now is the time to move across the country, try something totally new, go to law school or get an MBA, or quit a stable corporate job to start a business or work for a start up. What you do with your career this decade, will impact your finances for the rest of your life.
3. Plan for the Future: Settling Down Happens Quickly
Ask any 30-year-old woman what has happened to her Facebook feed in the last two years. She'll tell you it has gone from friends posting wedding and travel photos to a feed filled with her friends' baby photos. You start your first job at 22 thinking your 30-year-old coworkers are so old because they don't go out to happy hours and instead head home to be with their familes. Before you know it, you are 30, and you're the one going home to your kids and spouse, instead of out for drinks. So, use your 20s to save for this settling down that will likely happen by the time you're 30. Start saving for your wedding, for your house, and for your future children.
4. Spend Enough to Enjoy the Present
While you should save in your 20s, don't save so much for the future that you fail to enjoy the present. If you want to quit your job to travel the world, do it. It's going to be 1000 times harder to do when you're 34 than when you're 24. Plus, society is far less accepting of a 30 or 40-something year-old woman who quits her job to travel (unless you've experienced a traumatic divorce and are soul searching, a la Eat Pray Love). So spend on the big things, but also on the small. Go out for drinks with friends, to concerts, and sporting events, because you'll never be more able to than you are when you're an unsettled twenty-something.
5. Find a Job With Good Maternity Leave
Setting down happens quickly, and often when you're not even looking. You likely won't be thinking about your job's maternity leave when you say "yes" to your first or second or third job offer of your 20s. But you should. Chances are that you'll stay at that place of employment longer than you plan, and you'll want to be covered if you become pregnant. Choose a company with a good maternity leave policy.
6. Women Still Earn Less Than Men
My mom likes to tell me about how when she was my age, women lawyers could wear nothing but skirt suits and pantyhose. Pant suits were simply unacceptable. At a dinner interview where spouses were invited, people assumed it was my dad interviewing, not my mom. Granted, things have changed for women since 1984; but not as much as we'd like. Women only account for 20% of corporate board seats, 20% of US Senate and House seats, and about 33% of doctors and lawyers. And women still earn about 78 cents for every dollar a man earns.
7. It's Good to Live Somewhere Cheap and to Live Frugally
Every woman in her 20s should live somewhere that is far less expensive than she can afford, and spend far less money than she reasonably could. Why? Because someday later on, when you are worried about the job market or what would happen if you got a divorce, you'll have confidence that you can get by on a lot less. It's much easier to gain this confidence at 25 than 45.
8. No Matter How Much You Learn About Personal Finance in Your 20s, You Don't Know It All
Most women learn an enormous amount about money in their 20s. We earn our first paychecks, start our 401(k)s, pay medical bills, taxes, mortgages, and more. There is a lot to learn and we mostly learn it out of necessity. But, by the time you reach your 30s, you realize that there is still more to learn. Thankfully, by this point, even if your finances are in rough shape, you have confidence that you can learn more and have the resources for doing so.
What financial lessons have you or did you learn in your 20s?
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