How to Become Financially Fit in your 20s in 6 Practical Steps

Have you ever learned a skill and became really good at it? I bet you have.

And if the answer is yes, then here’s the twist: Making money is indeed a skill.

And as Brian Tracy, a renowned motivational speaker, once said during a speech,

"If you can drive a car, you can learn any skill."

More so in your twenties, may I add.

This means that, much like some of the skills you’ve managed to learn at some point in your life, financial and money-making skills are equally learnable.

Keep reading to ace six essential personal finance skills and move closer to reaching your financial goals.

1. Spend less than you earn.

While saving money alone won’t turn you into the next Warren Buffet, living below your means is where it all starts. We’ve all heard that investing money rather than saving it is what builds wealth; however, without putting a sum of money aside regularly, there will be nothing left for you to invest once an opportunity crosses your path.

Having said that, cutting expenses is easier said than done as you’ll find yourself these days bombarded with ads and bargains all the time. You might even have to eliminate your debt first, but in case you’re lucky enough to have none, here’s how you go about it:

First, if you’re into bad habits—some are just bad—such as smoking, junk food, frequently eating out or buying Starbucks coffee, you might want to consider doing yourself a favor and getting rid of them. Once you’ve done that, you’re already doing much better financially. Besides, saving money and a healthy lifestyle always seem to go hand in hand for some reason, so there’s your cherry on top. A couple steps you might want to take as well are:

• keeping track: One of the most popular ways these days is installing a personal expense tracker app.
• planning ahead in broad strokes so that you know your limits and keep your spending habits in check.
• hiring a personal finance coach if you can afford it.

2. Never hit rock bottom

A mistake most money-savers make has to do with their objectives. They simply save to buy a luxury they’ve been fancying all along. Once they buy it, dopamine hits, and they go into reset mode, where they will be spending another couple of months of their lives lusting after another luxury.

Not you!

Once you’ve set money aside and been on an upward trend for some time, zeroing out your wealth is now out of question. And don’t gibe at the word wealth, for you are now in a wealth mindset: You possess wealth, and the first step ahead is to keep it at all cost. If you think about buying yourself a treat every so often, you’re going to do it wisely.

Don’t buy anything if you don’t have twice, thrice the price. The more the merrier. If its price is all you have, then you will treat it as the big prize; however, if it costs $100 and you have accumulated $300 so far, you’re at a different level now, and this luxury has now become beneath you. You look down on it, and you’re less likely to buy it unless you still believe that it is of great value to you, in which case go ahead and buy it. The only difference is that now you still have wealth to grow, and the upward trend continues!

3. Be free. Avoid unnecessary commitment

I assume you’re reading this article because you’re seeking financial freedom, so you should start by acting as a free man or woman. This means very few people will have a say with regard to your financial decisions, except for your parents maybe, siblings, your partner, and the like. Other than these, whether it be peer pressure such as your friends insisting that you go out with them, an overbearing boss who doesn’t respect your boundaries, be aware that, at least to some extent, this is a commitment you’ve willingly made at some point in the past.

All these commitments you have to keep in check. You want to be free and make decisions as easily and smoothly as possible. So, question peoples’ authority over you as most of it really is make-believe.

Another major financial foe is the lack of emotional intelligence, which is of the essence when it comes to your financial well-being. Unregulated emotions are something you can’t afford on your way to financial fitness as every mishap will elicit a fight-or-flight response, hindering your ability to efficiently solve the problem at hand, preventing good interpersonal communication and impairing your overall quality of life.

Poor quality of life means you’re not happy. Next thing you know, you’re seeking instant gratification as you’re no longer excited about the future and as a result, you’ll mishandle your wealth. This is not to be treated lightly, hence the next step:

4. Be happy and optimistic

Happier people not only tend to live healthier, longer lives, but they are also generally more productive, creative and clear-headed, and better problem-solvers. Your only job is to make yourself happier, and one way to do it is increasing your emotional intelligence by reading up on the subject and then putting all the knowledge into practice, and it’ll be a matter of time before you learn to control your emotions and keep them at bay. Not to mention that low spirits will make you introspect excessively, brood over your misfortunes and therefore become oblivious to opportunities around you.

Another invaluable mental attitude to adopt is optimism as it will help you expect the best and as a result take risks and embark on profitable ventures more easily and with alacrity. Much like happiness, an optimistic outlook on life boosts your productivity and hard work, and as film producer Samuel Goldwyn once said, the harder you work, the luckier you get. After all, this is what people who attribute financial success solely to luck often miss.

5. Don’t form attachments to money

At some point on your journey to financial freedom, you must realize that money isn’t your holy grail. Money is of little to no value, and there are other types of assets out there that retain their value far better than banknotes. This why you should look for inflation-proof assets such as gold, real estate, a business, commodities, etc.

This shift in thinking is quite epiphanic as far as financial education is concerned, and while this is really personal finance 101, most of us have been taught to place too much value on unstable currencies. A wealth mindset requires you to search for value, which means it’s all about how much you’re willing to pay for a service or product, and that price labels don’t necessarily mean a thing. For instance, how about you buy a super comfy mattress that improves your sleep? Or maybe a more powerful computer that helps you get more done in less time?

Money is a poor place to store value. It’s rather a transactional vehicle for it.

6. Invest in yourself

Say you own a business, and you’re looking for a highly skilled manager to help it grow. You will certainly look for one with a great CV. You will make sure he can handle the job, won’t you?

When it comes to your personal finance, you’re the manager, and therefore, you need to make sure that this manager, meaning you, can handle the job. This means investing in yourself, which you’ll come to realize is great personal financial advice. Learn all about emotional intelligence, time management, people skills, MS Excel, leadership, sales, business writing, a new language, you name it. It might seem overwhelming; however, remember that you’re still in your twenties, so you have your whole life ahead of you to tackle them one after the other.

Lifelong learning is at the center of self-investment. Continuously look for the next big skill that could propel you career, open up new opportunities, and improve your wellbeing.

Next comes your personal image. Picture yourself walking into a room: How will others perceive you at first glance? And how can you improve this perception? By buying new clothes, improving your posture, walking slower and more decisively, or maybe leaving your phone in your pocket as you enter? This is yours to figure out, but always think of yourself as a walking business bent on building trust in whoever it comes across.

Another thing you should aim at is higher productivity. You should practice doing more in less time, doing more with less. Let go of bad habits, procrastinate less, declutter your environment, build self-discipline, work out and eat healthy, and so on. This shouldn’t be rocket science after all.

Each one of us has a different place to start his self-development journey. Figure out yours and have at it.

Now that you're to put these steps into action, bear in mind that financial freedom doesn’t happen overnight. Much like a building, it cannot be built without deep foundations, and taking these six steps is like laying those foundations. Keep in mind that these steps should be put to practice together, and following one without the other is like putting up a tilted building doomed to collapse sooner or later.

Share this source of information with your peers who are also on their own financial journey or who you might like to see give some thought to their financial future.