You may be wondering, is it normal to struggle financially in your 20s? The answer is a resounding yes. No one expects you to figure everything out when you’re just starting out of the gate. They’re too busy trying to figure out how to live normally after college, anyway.
In my early 20s, I was barely graduating college. I was 21 and ready to tackle the world with the new personal finance knowledge I learned. Why is personal finance important? I learned the hard way that it’s important because others take advantage of you if you don’t take care of your finances.
After graduating college, I lived paycheck to paycheck. I lived in the slums, in a cockroach infested apartment paying just $600/month. Also, I cooked every single day because I didn’t want to pay that much money for food and a meal.
Is it normal to struggle financially in your 20s? Yes, absolutely. The biggest reason is because wages haven’t kept up with inflation nor productivity. Even in my late 20s, I still struggled financially, even after years and years of saving and investing a majority of my income.
No matter how many hours you work, it’s not easy to build wealth and achieve upward mobility in your younger years. This is a crucial reason why have a side hustle? It’s difficult to depend on someone else whose interests are to pay you the least amount of money possible.
They are not going to act in your best interests, it just doesn’t happen.
Is it Normal to Struggle Financially in Your 20s? Yes. Reasons Why
Below are the 3 concrete reasons why it’s normal to struggle financially in your 20s. If you’re feeling it, everyone else is feeling it too.
1) Why is it Normal to Struggle Financially in your 20s? Wages Haven’t Kept Up
The productivity wage gap is readily apparent, not just in the United States, but across the world. Employees are producing output at the highest pace than ever but are not getting compensated in exchange for that productivity. There’s good reason for that.
Companies answer to shareholders and not to employees. Companies place shareholder interests above the employees’ interests. Even if employees are shareholders too. Shareholders are actively working against the employees interests because it conflicts with their own.
Wages haven’t kept up with neither inflation nor productivity and the phenomenon trickled down to the recent college graduates. It’s become increasingly harder to increase standard of living, because the standard of living stagnated.
Is it normal to struggle financially in your 20s? Absolutely. The system is designed for you to struggle financially.
2) School Doesn’t Teach You Personal Finance
Governments and companies have a vested interest in keeping you in the workforce for as long as they possibly can. Therefore, they refuse to teach you personal finance, not even the basics. They want you to accept the “reality” and “norm” that you should work for 40+ years and retire.
Let social security take care of you afterwards. That’s not the right model. You don’t have to follow that model. There are ways to retire earlier and enjoy your life with your family decades earlier than that timeline. As long as you employ a disciplined approach to your finances, things fall into place.
Is it normal to struggle financially in your 20s? Yes, school just doesn’t teach personal finance. You have to learn sound financial and money habits all on your own. This doesn’t mean that you should stop working altogether after financial independence.
Making money is a source of joy for the majority.
However, it does mean that you should have the option to retire early, whenever you want and however way you want it done.
3) Many One-Time Purchases Happen in Your 20s
One time purchases include furniture, a car, possibly a house, and more. These one-time purchases are expensive. It cost me minimal dollar amounts because my friends donated their furniture to me when they moved out of state. I spent $1,250 for a dining table and a king sized bed.
That’s it. My friends donated their couch set, TV, vacuum cleaners, and the like to me. These purchases, though I thought was frivolous at the time, are absolutely necessary. You can’t compete against someone else who furnish their house with the necessities.
Is it normal to struggle financially in your 20s? Absolutely. The most expensive purchase you’ll make, for sure, is a car. Cars are a necessity in the United States. These one-time purchases are things you don’t have to buy again for at least 5 – 30 years.
They unfortunately have to be purchased during the lowest income earning years of your life.
How to Not Struggle Financially in Your 20s
Is it normal to struggle financially in your 20s? Yes, but it doesn’t have to stay that way. Below are 9 ways you can stop struggling financially in your 20s. When we have problems in front of me, we solve them! This is one of those solvable problems.
1) Follow a Budget to Not Struggle Financially in Your 20s
A budget is the most crucial thing ever in your 20s to employ prudent financial decisions with. There are even people who discourage you from having a budget at all. What! Your 20s are when you build the foundation to achieve upward mobility in the subsequent years.
When you start your foundation with sound financial decisions like having a budget, then you’re destined to set yourself up for success in the later years. A budget that outlines the essential expenses is a good thing to follow.
Once you lower and minimize your expenses as much as possible, that’s a good thing. Spending the same way as you would making $200k as you would $50k makes you unstoppable. I minimize my expenses to only spend $1,500 – $2,000/month.
Even with high inflation going on these days. Expenses are my enemy that I have no interest in feeding more than I have to.
2) Read Personal Finance Blogs
The ones who read personal finance blogs have better financial literacy than the ones who don’t regularly read personal finance blogs. Personal finance blogs is how I got my start. There were actual millionaires and multimillionaires giving out this advice for free on the internet.
What! Sign me up! Is it normal to struggle financially in your 20s? Yes, when you consider that few even bother to read personal finance blogs. Few put in the work to educate themselves on how to build wealth and move up in life. This is what’s exciting.
They would rather spend $2k/mo on their apartment and $1k/mo on their cars than face the reality that their finances are in trouble. People who are in their 30s and 40s don’t even have financial literacy set in place. It’s even worse for people in their 20s.
It’s what helped me get to $400k by 26. Almost in the top 1% for my age group. Reading personal finance blogs.
3) Is it Normal to Struggle Financially In Your 20s? Not if You Make More Money
Wages are low when you’re in your 20s. However, that doesn’t mean that it has to stay that way. It’s time to move jobs, start a side hustle, and look for promotion opportunities to get to the top. That’s winning 3 ways. Whether we like it or not, we have to increase our income.
The company is not going to hand you a bigger check all on your own. You have to actively seek out ways to increase income yourself. Depend on no one else but yourself to do so. Although the money isn’t everything when looking for a job, it’s a pretty important part.
Is it normal to struggle financially in your 20s? Yes. Therefore, you have to increase your income all the time. I personally prioritized on the wrong things in my early 20s. I prioritized saving my money instead of focusing on the really important part of making more money.
Even $100k doesn’t do much justice anymore, even more so with a family. $200k is when the fun really starts to happen.
4) Stop Frivolous Spending
Americans aren’t broke because of their income. Americans are broke because of their spending. If you live in a mid cost of living city and are single, then you can easily live on $20,000 – $25,000 per year of spending. That leaves room for excess spending every single month.
Then all you have to do is increase the income side of the equation much more. Is it normal to struggle financially in your 20s? Yes but that doesn’t mean you can’t minimize the struggle. Many of my friends were living in $2k/mo apartments after college.
What! For what? To this day, they haven’t gotten a return on their rent at all. They went out to bars and spent money, happy that they finally had livable income after being a student for so long. Frivolous spending is what sinks families’ financial lives.
There’s no reason to get into debt just to live. That’s not the right financial decision.
5) Use Credit Cards Responsibly
Credit cards are amazing. Credit cards build wealth. However, that’s only true if it’s used responsibly. Credit cards are a great way to earn an extra $1,000 per year, without paying additional money. Not only that, they build your credit. I have a near 800 credit score due to my credit cards.
They give me anywhere between 3 – 5% cash back to my spending. That’s a great tool to build wealth with. However, that doesn’t mean that credit cards are the best things since sliced bread. You have to manage your credit cards responsibly and consistently.
Otherwise, you drown in debt with some of the highest cost of debt percentages ever imaginable. The poor maxes out their credit cards while the rich maxes out their retirement accounts. The credit limit on the credit card is just a suggestion, not a necessity.
Is it normal to struggle financially in your 20s? Yes, and a big culprit of that is frivolous credit card spending. Too many young people max out their credit cards without knowing the consequences.
6) Live Like a Student
You were making $0 and struggling. Now you’re making $60k and struggling? That’s not right. When you’re in your 20s, no one ever expects you to have it all figured out. Now is the time to look and be poor as much as possible because people just expect you to be.
It’s in your best interest to live like a student in these times. No one cares whether you sleep in your mattress and not a normal bed. No one cares you drive an 80k mile beater car. As long as it gets you from point A to point B, it works just fine.
Is it normal to struggle financially in your 20s? Not if you continue to live like a student. People may care how you live like what kind of food you eat and car you drive, on a one-off day. But people will really care when you have a million dollars worth of assets by 30.
They’ll be much more impressed then. That is a great measure of success.
7) Shop for Discounts
Discounts are nothing to be ashamed of. I still look for coupons and discounts whenever I can on my meal and grocery shopping. During Black Friday of 2022, I bought the latest MacBook Pro… for a whopping $1,000. They normally go for $1,400, all in!
No matter how wealthy I am, I always look for discounts to buy quality products at a cheap price. This investment in a new MacBook Pro will pay off in spades for me as it is much more efficient than my prior MacBook Pro. The additional efficiency is worth it.
Never pay more money than what you have to. Only fools pay the full retail price. Even billionaires haggle often. You shouldn’t be above haggling, as haggling is a famous billionaire spending habit. Companies like it when you use coupons and take advantage of discounts.
It means they wouldn’t have had a sale otherwise. Discounts are win-win.
8) Cook at Home
With inflation running rampant, food prices are going through the roof! Cooking meals at home is not only healthier, it’s better for your wallet as well. Is it normal to struggle financially in your 20s? Not if you cook your meals and save money.
Not only do you know how to cook, it saves you money, and you have more variety of options to cook food the way you want it, when you want it! I always cooked a week’s batch of chicken to take home to the office for 2 years straight.
It saved me $5-10/meal, which would add up to thousands by the year’s end. I no longer have the need to do something like that, but when you’re young, you have much to prove yourself to the world. You have to put in more effort than the one who already made it and put in their dues.
It’s time to be more nimble and put your endless energy to good use.
9) Is it Normal to Struggle Financially in Your 20s? Not When You Invest Money
A dollar in your 20s is worth so much than a dollar in your 50s. Is it normal to struggle financially in your 20s? Yes, especially when you don’t invest your money. It’s time to max out your 401k, HSA, and Roth IRA as much as you can.
There are so many friends who refused to contribute even to the company 401k match for their first job. I maxed out those accounts as much as possible not only to lower my tax burden but to invest as much money as I possibly could.
It paid off in spades now because I have a quarter million dollars in those accounts to boot. In just 7 years. Investing boosts and increases your income. It gives your income that extra boost to move up in the world more. Too many people don’t understand that they can literally buy income.
Investing is the way to do so.
Is it Normal to Struggle Financially in Your 20s? Absolutely
I don’t know anyone who hasn’t struggled financially in their 20s. The ones who didn’t struggle financially in their 20s didn’t even know they were struggling financially in their 20s. It was the most incredible thing I’ve ever seen. Ignorance is bliss when it comes to money.
Is it normal to struggle financially in your 20s? Yes, and especially more so if you don’t come from a rich family. Actually, even the ones who came from a rich family had issues because their parents didn’t give them handouts. The parents expected their children to work and be productive members of society.
Financial literacy is at an all time low across the globe. Even though there’s so much free resources available for people to take advantage of. No matter how much I contribute my voice to sound personal finance habits, I know it’s never going to be taken seriously by the majority.
Therefore, I’m only appealing to the small minority of people who’ll actually listen to my advice. Is it normal to struggle financially in your 20s? Yes, I’ve been through it myself. However, that doesn’t mean it always has to stay that way.
Making more money and spending less money will always be the blueprint to financial success. There’s no company on Earth who is successful by paying employees more money than their revenues. It’s the same way for you.
The great part is that you are in charge of controlling your financial future.
Is it Normal to Struggle Financially in Your 20s? What to do
- Follow a budget to not struggle financially in your 20s
- Read personal finance blogs
- Is it normal to struggle financially in your 20s? Not if you make more money
- Stop frivolous spending
- Use credit cards responsibly
- Live like a student
- Shop for discounts
- Cook at home
- Is it normal to struggle financially in your 20s? Not when you invest money
