Budgeting/Essays & Confessions

7 Things No One Tells You About Becoming Financially Responsible In Your Early 20s

By | Friday, February 01, 2019

Finally! You’ve graduated, found a job, make your own money and thereby, have found independence! If you really think about it, you’ll come to realize that your entire childhood and teenage and young adult years have been preparing you for exactly that. And although it was so long in the making and it is a huge step, people don’t really talk about what comes with being financially solvent (meaning that you don’t rely on anyone financially). Here is what I have experienced:

1. It feels liberating

There’s nothing quite like the feeling of purchasing something that you have earned without feeling like you’re murdering your bank account. Up until then, everything that I purchased was either financed by someone else (in this case, my parents) or required me to sacrifice a significant amount of my small babysitting earnings. Now, I can buy stuff and not feel guilty about how I am using someone else’s money or without feeling scared of digging a hole in a small budget, and it feels great!

2. It’s also crazy scary

But here’s the other side of the coin — being financially solvent also means that you are financially responsible for whatever life throws your way, whether it is a surprisingly high electricity bill or a random extra rent fee. There’s no more safety net or playing the bill-unaware child anymore, and it’s a little unsettling.

3. It’s not only about rent and food

The first time I budgeted being financially solvent, I calculated my rent, estimated my living expenses, thought of a healthy security saving amount, and considered that I could treat myself with the rest. Then came the end of the month, with its two friends: electricity and cable bills, now what do I do? Luckily, the amount that I had saved covered almost all of these bills, but really before you spend your “extra” amount, make sure that all your bills are accounted for and covered.

4. Anybody could be someone’s sugar daddy

Remember in New girl when Nick wondered who could possibly want him as a sugar daddy, considering how broke he was? Well, being the first person in your friends group to become financially solvent gives you an answer to this question. The only person who would want a broke person to be their sugar daddy is a broker person. Of course, this won’t apply to most of your friends, but some lovable penny-pincher will take a chance and try to make you pay for everything and anything “since you’re making big money.” Now, don’t get me wrong, I get it — we’ve all been tight at some point, and it’s fine to help a friend our. Just make sure to not become a walking ATM.

5. You understand “adults” and their obsession with work

As a teenager, I always thought that I would never be someone who worries about work or who even thinks about work in the evening or in the weekend. I never understood why some adults would make such a big deal about it. Sure, I understood that it was important and that it is required to afford a living. However, questions like “should I stay in a job that I don’t love?” seemed obvious to me: if you don’t love it, quit it!

Now, though, I get it. Luckily for me, I love my job, but if someone was to ask me if they should quit a job that they don’t love, I would tell them to think twice about it. Once you make your own money and realize the real cost of living, having a stable job and a safe income truly feels like such a blessing. And even if your job isn’t what you want, the perspective of losing that safety net is very disquieting.

6. You know nothing about finance

If you have the chance to start your adult life with a bit of financial education, you’ll know that investing is key to financial growth and health. And because you know that, you think you will know what to do once you do have some savings. Yet here I am with my $800 of cumulated savings, being completely overwhelmed with all the investment options. What do I invest in? Long- or short-term investments? Should I consider the stock market? Do I take into consideration the company’s balance sheet, profitability, Beta, price to earnings ration, or dividend history?

The truth is, knowing that you need to invest and knowing how to are two completely different things. Thankfully, there are plenty of ways you can get help to intelligently invest your money. Nonetheless, it is a definite eye-opener about how much you really know about how money works.

7. The more the merrier

Lastly, if you are in a situation where you have graduated or found a job earlier than your friends, you might come across some lonely times. I graduated early, and as I said in point 2, I was a little stressed about it. I knew it was a big responsibility and that it could be more difficult than it seemed. Having graduated a year to a year and a half earlier than the rest of my friends, I was alone in my situation. The first month was especially tough. I was freaking out a little about how everything was going to fit into my salary, and no one in my close group who could relate. So a little piece of advice — if you are looking into or about to become financially solvent, find yourself a struggle buddy!

Astrid is a 23-year-old digital marketing professional living in Paris. She has traveled a lot throughout her life and has lived in 6 countries in the past 5 years. She is very passionate about financial independence, travel, and morning lattes.

Image via Unsplash

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