Mortgage-backed securities, sub-prime loans, traunches…. It’s pretty confusing, right? Does it make you feel bored or stupid? Well, it’s supposed to. Wall Street loves to use confusing terms to make you think that only they can do what they do. – “The Big Short”

Savings. Does the word send shivers down your spine?

As a Millennial, the (credit) cards may feel hopelessly stacked against you. Everyone said “go to college and a good job will easily follow.” No one prepared you for entering the workforce in the wake of The Great Recession. No one warned you about how long student loans would follow you. No one explained how truly tight life is on a entry-level salary. Living paycheck-to-paycheck often seems like the only way to keep your head above water. However, if you can master the art of saving at a young age, not only are you setting yourself up for a secure future, but you’re also building a powerful muscle of financial self-control.

Disclaimer: I am not a financial professional, just a young person who has worked to gain basic financial literacy.

Build an Emergency Fund

To move away from the paycheck-to-paycheck panic, focus on building an emergency fund. Truly audit your life, exploring what short-term sacrifices you can make. Brew your own coffee instead of buying a fancy latte. Funnel your entire tax refund directly into savings. Sell personal items you no longer use. Surely there’s something you can sacrifice, even $10 a week is better than nothing. You never know when you’ll have a medical emergency or car failure or suddenly become unemployed. However, the one constant with emergencies is they will happen to everyone.

Recommendations vary for emergency fund goals, but most advisers recommend saving 3-7 months’ worth of living expenses. Start small, focusing on just saving $1000. After your first $1000, shift gears to save the next $1000. Breaking this into small goals will make this feel more manageable.

Credit Cards

Don’t. Just don’t. There’s so much to be said on the topic of credit cards: How high interest rates will be your demise. That you should always pay them off in full. You don’t need more than one. You should avoid any with annual fees.

Credit spending will undermine your saving goals. If you’re drowning in credit card debt, then focus on paying off the highest interest rate debts first. Cut up the cards and throw them away. Paying off your 17% interest rate card is a 17% guaranteed return on investment for those dollars, way better than the return on a boozy brunch.

financial decisions
Image via Michelle Madsen

Start Saving for Retirement

Financial professionals everywhere advocate the value of starting a retirement account in your 20s. Touting the power of compounding interest, you’ll vastly multiply your investment if you start saving at 25 versus at 35. Once your emergency fund is healthy enough to protect you from catastrophe, start saving for retirement.

401(k)sEmployers regularly provide 401(k)s and often offer matching programs. Matched funds are basically free money, so sacrifice as much as you can from your paycheck to take full advantage of these. Not doing so means leaving cold hard cash on the table.

Personal Retirement AccountsIf your workplace doesn’t offer 401(k)s, consider opening a personal retirement account. There are many options: IRA, Roth IRA, HSA’s, etc. Talk to a personal investor about your best option, but make sure your investor is a “fiduciary,” which means they’re legally obligated to act in your best interest.

Start Saving for Goals

After establishing an emergency fund and retirement savings, you can now save for life’s big purchases. Maybe you want to buy a car, go on vacation, or plan for your wedding. When your friends post magical pictures of what’s going well in their life, it’s easy to get caught in the Instagram jealousy game. Don’t forget, they had to pay for that photo, and many them are doing so with credit cards. No amount of Instagram likes will feel better than paying for a major purchase in-full and with cash.

No amount of Instagram likes will feel better than paying for a major purchase in-full and with cash.

Be Smart with Extra Income

If you get a raise, bonus or any other unexpected extra income, divert that directly into savings. You’ve already figured out how to live at your current salary. You won’t even notice the difference, but your savings will thank you for the bump.

Fall in Love with Finance

Recently over dinner with my best friend, she mentioned how she’s become fascinated with finance and loves talking about retirement plans with her co-worker. I enthusiastically revealed that it’s also become so exciting to me. We’re total finance nerds.

There’s a whole world of helpful resources out there to self-educate yourself on personal finance.

If financial personalities interest you and you want to know, “can I afford it?” Suze Orman is a hoot. Dave Ramsay also educates with charisma, breaking financial freedom down into digestible baby-steps.

Maximize your daily commute by listening to economic podcasts. Planet Money and Freakanomics make big economic theories personal by connecting humanized stories to tales of dollars and cents. The Minimalists focus on living within your means and pepper amazing financial wisdom throughout.

If you prefer films, The Big Short is fascinating. Last Week Tonight often covers finance while also cracking you up, like this segment on Retirement Accounts. If you prefer documentaries, check out Frontline: The Retirement Gamble.

Surround yourself with the vocabulary of economic theory and personal savings and before long you’ll become fluent in finance. You even might just fall in love with savings.

Do finances overwhelm or excite you?

Feature Image via Liz Ballmeier


  1. Wow, incredible article. My parents have raised me this way so I’ve been saving money ever since I was a little girl. I just got my first credit card not too long ago since I shop online a lot but I chose one with no annual fee, use it strictly for online purchases, and pay everything off when I get the bill. It’s an important habit and I’m so glad you’re sharing these valuable tips!

  2. I agree with most of this article, but I was disappointed to see “Don’t. just don’t.” As your advice for credit cards. If you already have a lot of credit card debt- then yes, pay that off and try to rely less on credit spending. But as a young person it is so important to establish a credit history to build a good credit score. The important thing to own a credit card RESPONSIBLY- I believe your part of credit cards should have focused on that rather than glossong over it.

  3. Early on in your (wonderful) article, I suspected Dave Ramsey as one of your inspirations in writing it. Thanks for this, the world needs to hear it!!

  4. So good, Talitha. This is similar to a bit of advice I should have gotten in my 20s that saved me in the nick of time in my 30s… I always made really gorgeous budgets in Excel, but never really stuck to them….

    1. I’d be lying if I said I always stuck to my spreadsheets myself. Temptation creeps in regularly…. But even just regularly looking at your money is an amazing starting point because at least you have an awareness of what’s there.

      Thanks for the comment!

  5. Love this! Hiring a financial advisor in our mid-twenties was one of the best things my husband and I did after we got married. It has helped us pay off debt, save for retirement, and get on the same page about our goals for the future (house, kids, etc.). Great advice!

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