Thanks to AllFinancialMatters for pointing out this story from MSN Money featuring some average personal finance statistics of people in their 20s. For example, our median net worth is $7,901, but for nearly 25% of us, that figure is negative. We owe more than we own!
These numbers are exactly why I created this site! Immediately upon graduation I fell into the trap of living like an adult even though I was earning like a graduate… A few years later and I am really in the hole. But as the MSN story points out, I am young enough to recover from my mistakes. With some planning and hard work I will be out of debt and have a healthy 401(k) before I turn 30. Obviously this site is all about how we can all do the same, but in a nutshell there are three rules that will be repeated here over and over again!
- Kill Your Credit Cards: High interest credit card debt has to be the first to go. Use all available resources to rid yourself of this debt as soon as you can.
- Save for Retirement: Check out the calculator at AllFinancialMatters showing how much more you will have to save each year if you postpone starting your 401(k) or IRA.
- Live Below Your Means: Once you pay off your consumer debt, you must spend less than you earn to avoid going back in the red! Keep only one credit card for emergencies that must be paid off every month. Create an emergency fund with the money left over each month to fall back on in emergencies. Use this site’s budgeting tool to help track your spending.
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