10 Financial musts before age 20 (4 of 5)

This is the fourth of five posts (in our Financial Must series) where we’re aiming to provide you with a tremendous foundation to achieve your financial goals. We will be posting 1 more list next Friday (April 1). We have the previous six Musts listed below to remind you what we’ve covered. If you’d like to read about those in detail, check out Must Post 1Must Post 2, or Must Post 3. Thanks for reading!

1) Find a way to earn an income and do it at an early age.

2) Set goals for yourself financially, and make sure at least one is attainable in the short term.

3) Open a checking account.

4) Get a credit card with a low limit.

5) Do not put anything on that credit card if you don’t have the money for it in the bank.

6) Start an investment savings plan.

7) Live frugally and save as much of your income as possible.

I did actually live in that tent for close to a month... I feel like we'll cover that at some point in the future.
I did actually live in that tent for close to a month… I feel like we’ll cover that at some point in the future.
Two questions: 1) What do you need (like absolutely need – we’ll touch on this below)? And, 2) is your income solely responsible for providing those needs? This is obviously variable and largely dependent on your home-life-situation. So answer this question for yourself honestly. Whether you live with your parents and only need to provide your own gas money to get to work and back, or provide for more of your own expenses, there are ways to cut costs. Cutting expenses either allows your money to go further in providing for you and your family or frees up funds for savings. I am asking, no urging, you to pick a goal for some amount to save each month… Then add a bit to it. By now you know the power of compound interest (if not, check this post out).


Below are a few tactics Monica (my wife) and I have used to cut spending and balance the budget (I’ve been watching the primary debates lately, forgive the rhetoric). Please understand this list is just a tiny pin prick in the possibilities. Use your imagination and I’m sure you can come up with your own. I plan to post a more detailed list in the future but we’ll start here.


First things first, make a budget. It is extremely difficult to know what you have to save when you don’t know exactly what you have coming in and going out. Once you understand where each dollar comes from and goes, you are able to see everything you spend money on, you may appreciate the value of your dollars more, and you can better identify the things you waste money on versus the things you legitimately need.


  • Do you enjoy movies and going out to eat? That’s all well and good, just maybe once a month rather than every week.
  • Packing a lunch has both health and financial benefits, we don’t discriminate – love them all.
  • Pedal or walk if you have the ability
  • You eying up a new PS4 or bicycle, or whatever other higher cost object there is out there? Try this. Find out the price and build a fraction of that into you budget each month. This will do a few things – 1) you’ll be practicing the steps above by paying for something you’ll already have the money for thus not paying interest on credit cards, 2) by saving for a few months you eliminate the possibility of an impulse purchase. After three months if you still can’t wait for this item, that’s a good sign, if you can’t remember that you wanted it… Not so good, and 3) the practice of delayed gratification can drastically improve your life – financially, health wise, spiritually, professionally… – that’s amazing if you can begin to practice/learn it at this stage of the game.
  • Another way to improve the budget is to expand income earned (pick up more work). A possibility for some.
  • Cut out large cable bills and stream legally on the internet.
  • Shop around for cell phone carriers, there must be one out there that costs less than you’re paying now. The same goes for auto insurance, renters insurance, and whatever other monthly bills you pay.
  • Shop at a value grocery store
  • Cook most, if not all, of your meals
  • If we want to get drastic here, don’t leave lights on excessively, keep the apartment cooler in the winter and warmer in the summer, don’t buy books or textbooks just rent them from the library…
…This can go on forever. If you can find a way to slash spending and balance your own budget, you’ll be well on your way. Like other tactics mentioned above this will pay dividends for you later in life. You’ll have the experience necessary to get yourself out of a tough time and hopefully by doing these and other things you won’t have to worry as much when you’re earning a larger income.


8)  Learn to separate needs from wants and realize you do not need that new iPhone, set of beats headphones, or whatever else you think looks nice and shiny. The sacrifices you make now will payoff in multiples later in your life.


Really think you need something?? Give your self a time limit and wait that amount of time. If you still can’t wait for the item after a week, two weeks, a month, … , that’s a good sign. Water, food, and shelter are basic human needs that we literally can’t live without. So things like rent, groceries, and utility bills are definite needs. Transportation could be a need depending your situation and on where you live and work… I have a story about this one.


I took it a bit past ’need’ for transportation when first starting out. Humble brag – I had done pretty well with the above steps early in my life, mostly due to my parents providing a foundation and knowledge base. I developed a drive to earn some form of income and started working part time jobs around age 14-15. I saved and started building a decent sized savings account for a young 20-something. Credit card, checking account, the whole deal… But I definitely wasn’t terrific on this frugal part, not then anyway. Fast forward to the end of undergraduate college. I had graduated in good standing, been accepted into a grad school, had been done with high school and college sports, and let me tell you I wanted to jump straight to the end of this list. I felt like a reward was in order. While that may be true, the magnitude of reward I decided upon was a little big for my britches.


Notice this picture was taken prior to the weight loss. Actually, it was taken by my then girlfriend, now wife, on our first road trip… Oh the memories
Notice this picture was taken prior to the weight loss. Actually, it was taken by my then girlfriend, now wife, on our first road trip… Oh the memories


Hey, I needed some form of transportation to get to school and back… Oh yeah, this thing was awesome. Manual transmission, 0-60MPH much faster than I needed, and I just felt great driving it. My monthly expenses were pretty limited at that time, so I had enough income to cover the monthly payment… There just wasn’t room for much else in the budget. My financial foundation was thrown all out of whack. I drove over a nail at some point with this car (not purposefully) and had to replace a tire. When I caught a glimpse of the bill for the new tire I’d be replacing it with, I almost fell over. It was something like $500. For 1 tire! It had been about 1.5 years and I was beginning to realize this car, although amazing and spectacular to drive, was too much for what I needed. I needed a car for transportation, I didn’t need this car… I then was able to offload the Beamer for the car I am still driving today. This one may not be as flashy but it’s paid off and still running like new.


I learned through this lesson that although I needed a form of transportation, I really wanted that BMW as opposed to the Camry I drive today. I’ve seen now that was completely backwards and misguided, and that if we practice these principles early in life, payments for luxury cars just a bit down the road won’t be out of reach. So fight that urge to spend on a want when a ‘need’ is all you require. We’re starting early so it won’t have to be this strict down the road.


One other thing I’d be remised if I didn’t tell you… I was single at the time of purchase for the BMW, and yes, you’d better believe I thought the ladies would love that car. Over the course of time I had the car I started dating a young lady named Monica (If you’ve been reading this article through then you know where this is going… or do you?). She was amazing, funny, smart, really loved sports. She still is all those things actually, that’s why I married her. You’re thinking, ‘it must have been the car right?’ I picked her up for one of our first dates and took her to a mutually agreed upon hockey game. It was about a 30 minute drive and beforehand I was thinking this is great, secret weapon time… A couple of dates down the road we’re talking and I learn that she doesn’t know the difference between a Cavalier (now Cruze) and a Rolls-Royce… She didn’t even notice the BMW, but she did comment that the heated seats were nice.


Thank you for reading! If you’d like to read about our other financial musts, check out Must Post 1, Must Post 2, Must Post 3, or Must Post 5. If you’ve enjoyed this post please subscribe to the blog so that every new post comes straight to your inbox. You can also check out the YouTube channel (MikedUp Blog) or follow Mike on Twitter (@RealMikedUp). Have a question or comment? Let us know by commenting on the post or emailing Mike at [email protected]. We’re glad you’re here. Thanks again and talk soon!


– Mike
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