How Much Financial Responsibility Should A Twentysomething Have?

Posted by: Ali Jawin Filed in: news
10:00AM, Sunday June 28th 2009

Comments (24)

How To Become A Financially Responsible 20-Something

I am not great with money. I think the problem is I don’t love money. Don’t get me wrong, I love material things, but money in and of itself doesn’t really interest me. Maybe the idea of having money isn’t as compelling because as a recent college grad, I don’t have any. Until very recently money didn’t feel real to me. I loved the things it bought me, but the dollars themselves didn’t have much value. When did my attitude towards money evolve: the very second I opened up my first pay check. During my last semester of college I spent hours upon hours tutoring freshman on the finer points of writing and not using a hangover as a reason to ask for an extension on their term paper. I loved ~~every~~ almost every minute of explaining the beauty of the semicolon, but I wanted that paycheck. For every minute that I could have been doing something, anything else, I wanted compensation. At eight dollars an hour I was hardly raking it in, but I was so proud of each dollar.

Not gonna lie, my whole perspective towards money didn’t change. Rather, I still spend too much on clothes and restaurants, but at least I am starting to realize that I need to change my financial ways. OK, to be entirely honest, I realize the days of my parents paying my bills are numbered. My childhood of prepaid college room and board is most definitely over, and residing solidly in my 20’s, it’s time to tackle this money stuff out. It’s time to start figuring out scary things like rent, insurance and investing. Yikes! When did I become a real person with real responsibilities?

Realizing I know nothing about anything that actually matters, including how to balance a checkbook, I decided to do some hardcore investigating into what the financial experts say is the right amount of financial responsibility for you average clueless 20-something.

Do An Inventory of Your Finances: Do you even know how much money you have? The recession has done a number on all of us, but do you know how it has effected you? Talk to your parent or guardian and figure out how much money you have in the bank, if you have any debt or if you own any property. Once you know what you are working with you can decide how to proceed.
Talk To Your Parents About How Much They Are Going To Support You: Your parents might buy you your first apartment or they might never give you a penny the day you get your first paycheck in the mail. There is no right or wrong amount that your parents should or should not give you. It seems pretty standard, however, for parents these days to help their kids get settled and up on their feet. Help can come in the form of money or letting you back into your childhood room while you save. No matter what agreement you come, you should come to some agreement about how much the parentals are willing to give and for how long. You don’t want to rely on them forever or be the token fifty year old still living in the garage.
Make A Plan, One You Can Actually Stick To: Recognizing that even 20-something econ majors have a thing or two to learn about real world finances, devise a plan simple and realistic enough to stick with. If you are one of the many jobless casualties of the recession, don’t plan on receiving a monthly check. If you are in a new relationship recognize that you might spend a bit more on eating out and spanx. Basically, steal a tip from Socrates and know thy financial self. Budgets that do not reflect your life won’t work. I am not suggesting that you not try to cut back here and save there, but recognize that there is no way you are going to stop buying your favorite pricey lipstick.
Save, If Only To Get Into The Habit: Even if you are only saving a dollar a day, that dollar adds up. Concepts like retirement and paying for future offspring’s college tuition are quite alien to the strapping childless 20-something. Alas, the expenses shall come. Best be prepared for the rising cost of everything by getting yourself into the habit of stashing away part of your paycheck (or in my case babysitting money). No one expects you to have much money to save at this point, especially in your early 20’s, but maybe by the time you actually have a paycheck you will naturally put away some of the dough for a rainy day.
Learn How To Balance a Checkbook and Pay Your Taxes: Yeah…I don’t have a clue how to do either of those things. I am totally petrified by the concept of filling out all those forms, but I am a big girl so it’s time to step up to the plate. Maybe I will ask my dad to teach me…

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Tags: money, twentysomething, twentysomethings, money issues

Comments (24)

comments

fallonthecity
wrote on June 28 2009 @ 10:48 am: [report]

Wait, wait… I think I read that you don’t know how to balance a checkbook. You’re exaggerating, right?

kmatter
wrote on June 28 2009 @ 11:08 am: [report]

wow… i can do most of these things >_> and i’m only 19, but my parents were the kind to say *hey, it’s all you now, we’re not helping you* after i got my first job… way back when i was 15 lol. i mean, they let me live at home. but my clothes, my car, my insurance, and my *stuff* was all bought by me. so i learned how to save, and balance my check book, and pay attention to what money i do and don’t have. cuz it sucks when you don’t have it. not in the greedy way, but in the *now i can’t do anything way*

largemarge
wrote on June 28 2009 @ 11:16 am: [report]

Socrates! Yes.

Goldfinch86
wrote on June 28 2009 @ 11:17 am: [report]

Yeah, I’m 23, out of college for a year, I learned to balance a checkbook my first year of college because I needed to use my own money. My parents had my taxes done for me, because I’m on my own and don’t understand the forms, from now on I’ll be paying someone to do them for me. I pay my own bills and go to work. I really understand the concept of your wasting my time and I want compensation, like somedays at work, the days where the manager acts like a #&@$% I want more money to deal with her sassy attitude and to make what I do seem less like a waste of time and company resources. It also makes you understand the line “how much is my time worth”. I won’t do something if I feel like I’m not getting anything out of it that is worth it, like is it worth traveling an hour on the subway to get 20$ pizza? No, sorry it’s totally worth it to some people but unless I’m doing something else then it’s so not worth it to me.

Ms.NGuerrero
wrote on June 28 2009 @ 11:53 am: [report]

WHAT?? you didnt get your first pay check till you were pretty much a college grad??
you had it REAL GOOD girl. Im with Kmatter. 19 and I pay my own bills. good luck chick =] Its not soo bad once you get the hang of it =]

Emi
wrote on June 28 2009 @ 12:17 pm: [report]

I’m 23 and I’ve never owned a checkbook or had an ‘official’ job. I’ve been earning the majority of my money through freelancing art. I have a plan, and I buy what I need rather then what I want to save money. It means I don’t have a big closet, or a lot of material things to my name.. but it works for me. :D Oh, and thanks to my Accounting classes I know how to balance a checkbook and all that.

retro chic
wrote on June 28 2009 @ 12:37 pm: [report]

I’m twice over 20, but my 12-something daughter has an innate grasp on these things, if not practicing some of them, ie, she does her own earning, saving and banking. Small-scale, but it is real and concrete to her. Rent at 14 is next (j/k).

I think it is equal parts parental/other training, and a child of any age’s own personal values they attach to $$$. My daughter just happens to be one of those that loves money and security. I had the same training she did, but preferred experiential things, rather than those of material security.

The training from whoever and whatever source is key, tho, ‘cause it actually provides it’s own comforts, extinguishing unnecessary fears and mysteries, just knowing you know how to handle—anything.

MissChaotic
wrote on June 28 2009 @ 01:16 pm: [report]

I always forget to balance my checkbook, and I always overdraw my account. I am terrible at managing money, and now that I just moved out from under my parents, it is a huge adjustment. When your parents are supporting you, and all you pay for is eating out, entertainment, and shopping, you don’t learn much about how to manage money.

I agree with this article.

emflow
wrote on June 28 2009 @ 01:58 pm: [report]

I’m 24, living with my parents while working. And it’s probably going to be like that until grad school because I hate renting and have a very, very good relationship with my parents.

I’m a big fan of Ali’s tip about saving. Right now interest rates are awful, but when the rates are better I
like to put money into CDs (certificates of deposit) - they have a set time frame and interest rate. You can’t access the money for that time without penalties, but unlike stocks the gain is guaranteed.

MichelleS1017
wrote on June 28 2009 @ 06:01 pm: [report]

ok.. your last semester of college?? try 16,, when i got my first job

lilrockgoddess4u
wrote on June 28 2009 @ 06:22 pm: [report]

Must be nice. Got my first job at 15 and had a check book by 16. I am 23 now and do all the bills/checking/saving for me and my boyfriend. Very proud to say I have never bounced a check yet. Maybe it was just me, but I took a class in high school that was all about how to manage your money, pay bills, write checks, balance the checkbook, etc. Didn’t anyone else take something like this?

likeOMGkbye
wrote on June 28 2009 @ 06:22 pm: [report]

This is exactly what I’m trying to do right now, figure out my finances!

After getting my MBA, I got my first “real” job which starts in 2 weeks. Which is way below my level…and doesn’t pay that great. But hey, its a foot in the door of a great company! So now, living back home with my parents, with whom my father just got laid off and my mother works in a grocery store, I’m trying to figure out how to pay off my credit cards, car taxes, insurance; basically haul my own weight around the house. and its kind of terrifying. Looking like I might not be moving out as soon as I thought.

And I never balance my checkbook, whats the point when I have online statements and use my debit card for almost everything. Balancing a checkbook seems almost archaic to me, an old fashioned way of thinking in a world where its just not necessary.

retro chic
wrote on June 28 2009 @ 06:42 pm: [report]

@likeOMGkbye, yeah, balancing per se is archaic even to me, so, I do a visual scan of my online statement a lot ‘cause I found some whoppers on there, one that was 5-figures wrong—a bank error deposit that ended up in my account. Their own audits would catch it—not to mention the p/o’d customer who should have received it, but it proved to me that I could have been on the other end and not nec have caught it, or right away, esp at smaller amounts that could be overlooked.

Also, I’ve had ID theft twice, and was advised not to use Debit part of the card, only the Credit, as it’s more secure, and I too live by the Card (very little Cash).

AlbanianBeauty
wrote on June 28 2009 @ 07:11 pm: [report]

I know how to do all that, checks, bills, balancing checkbook. I always pay the credit card as soon as it comes in the mail - and make sure you have money in the bank. I know how to manage my own money, even though I live with my parents. They only do my taxes. Its kind of a family effort every year.
PS. Never pay in cash for certain things like car insurance, when you can use your credit card. A friend of mine paid cash once and when she was stopped by the police they saw she hadn’t payed it, when she did. Turns out the person had never registered the money.

powplz
wrote on June 28 2009 @ 08:36 pm: [report]

If you get to your 20s without your parents ever explaining to you how to balance a checkbook or create a budget, you probably want to look elsewhere for financial advice.

I learned how to balance a checkbook at 15, and while I don’t actually sit down and balance it anymore, I keep a very close eye on my finances. My mom is a CPA and my parents were frugal as hell, so I learned about this stuff early. I also get my CPA mother to do my taxes - she does taxes for a living, so it only makes sense to have her do them. Tax law changes every year, there’s nothing wrong with hiring a professional is absolutely not a bad idea if you can afforde it (note, H&R;Block and the like don’t hire tax accountants, they train people with people/computer skills to use their software).

Either way, always file your tax return. Even if you’re someone else’s ‘dependant.’ I know people who worked for years and never did them thinking they didn’t have to because their parents claimed them. Doesn’t matter - you earn money and it’s taxed, you file a return.

TotallyRidiculous
wrote on June 28 2009 @ 09:13 pm: [report]

I don’t understand what people mean when they say they don’t know how to balance a checkbook….it’s just adding and subtracting. I don’t have an actual “checkbook,” but I do have an excel spreadsheet where I keep track of my income and spending. Then I just compare it to what’s online.

Also, once I started paying my own bills and rent etc, I started a second checking account just for bill money. So every time I get a paycheck I put a set amount of money in my bill account. That way I always have enough money for my bills at the end of the month. It’s incredibly simple, really.

Alison Wonderland
wrote on June 28 2009 @ 10:12 pm: [report]

TotallyRidiculous- You sound just like my friend, she has a very similar system.

In defense of Ali, I didn’t get my first job until I was 18. (Summer after my freshman year of college.)When I was young my parents worked so I didn’t really have anyone to drive me/pick me up, and I didn’t live within walking/biking distance of any place of employment. (I wasn’t big on babysitting). Even when I got my license I was involved with sports; and we had a rule in our house that school always came first. So between late practices, homework and all day track meets on the weekends there just wasn’t any time.

hereshestands
wrote on June 29 2009 @ 12:53 am: [report]

Well wouldn’t it be nice if mummy and daddy paid for everything. I have been working since I was 15. Saving up to buy myself a car. I have bought all the clothes I now own and my lap top. I pay 70 bucks a week rent to live at home to cover groceries and internet. Thinking of buying my own internet though.

I think having to pay for everything yourself and “owning” it per say makes you treat it so much better though and appreciate things.

Ali Jawin
wrote on June 29 2009 @ 07:30 am: [report]

Just to clarify, this post was in no way meant to encourage people to have so little financial responsibility or independence. Rather, I meant to show that some manage to get through their teens and twenties and come out none the wiser financially. While this is by no means something to be proud of, it is a reality and situation that many girls find themselves in. Women who are money-savvy, help out your friend who isn’t. Everyone comes out of their teens with different experience and knowledge. Share your wisdom and see what you can learn from others.

Riley
wrote on June 29 2009 @ 07:31 am: [report]

I don’t get all the fuss over balancing a checkbook. I think it is more strange that you either write checks still, or don’t track debit card purchases online. Mine post immediately to my account and it is easy and paperless.

The only check I have had to write in the past 5 years is for rent at the various places I’ve lived. Everything else is online billpay or paid through the company’s website.

powplz
wrote on June 29 2009 @ 07:40 am: [report]

@Riley - as others said, the actual balancing of a checkbook is pretty outdated. That said, my mom actually whips out the checkbook and records every debit and credit purchase she makes. At the grocery store, buying gas, etc. It’s oldschool overkill for sure, but that woman does NOT screw up her finances.

I think that it’s still a good thing to sit down and learn to do just to get the lesson driven home that you need to pay attention to what you spend, keep an eye on your balance, and stay on the lookout for charges on your statement (online or otherwise) that you didn’t make or purchases you made/bills you paid that haven’t shown up but you can expect to lower your balance so there aren’t any surprises.

Humble Bee
wrote on June 29 2009 @ 09:44 am: [report]

I had to learn financial responsibility at a young age, I even help my dad balance his company’s finances, and I do my own taxes. It’s how you accustom yourself, I used to spend on the dumbest things, and now I try to invest. Every purchase I make, I try to make it an investment of some sort and make money out of it. If you’ve heard the term financial priority, it means exactly that. Make your finances a priority. It pays off.