After I graduated from college in the mid-1990s, I entered a competitive job market with more than $40,000 worth of credit card and student loan debt. As a member of Generation-X, I remember how many of my college classmates couldn't get jobs in their field of study. With bills to pay, I couldn't afford to wait for my dream job so I settled on the first job I could get while I continued to job hunt. Even though I didn't have a lot of money the first year, I made some wise financial moves in my 20s as my income grew.
Working as an independent contractor
For the first few months after graduating from college, I worked without pay for a local newspaper. I added the articles to my writing portfolio. My best financial decision was to start working as an independent contractor for a daily newspaper that paid well. I ended up making between $50,000 and $60,000 a year in my 20s, which was more than most of the full-time staff writers. I also had a lot of flexibility in the years that followed. When I had my two children, I could work out of the home, which saved me thousands of dollars on child care.
Saving money in an emergency fund
My next best financial move after graduating from college was to start an emergency savings fund. I was able to use some of the money to fund a Roth IRA when they first became available in 1998. I used a portion of the money to help me move across the country so that I wouldn't have to rely on credit cards. Some of the money would eventually go toward my children's college education. Having an emergency fund in my 20s got me in the habit of saving.
Learning about investing
Even though I didn't open a Roth IRA until 1998, I spent several years learning about the stock market and different investment strategies. I purchased several DRIPS (dividend reinvestment plans) that were hot in the early 1990s. Even though the value of some of my stocks went down due to the dot.com bubble, I learned the value of investing over time. The dollar-cost averaging approach did pay off in the long run, but in my 20s, I just had to have faith.
Buying my first home
It took me longer than I had expected to be able to buy my first home. However, my best money move in my 20s was to spend very little money on rent. I paid between $260 and $500 a month in rent by living in safe Midwestern towns that had a low cost of living. I was able to save $500 a month to use as a down payment on my first condo purchase at the age of 29.
Now that I have two sons who are in college, I think about what I could do to help them get off on the right path. When they graduate in several years, I imagine they will pursue some of the same dreams of owning a home and raising families. I do my best to communicate the personal finance lessons I learned in my 20s so they will minimize debt and maximize their earnings and savings.
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