 How To Manage Your Money In Your Twenties Robert Kiyosaki, the author of Rich Dad, Poor Dad said, It's not how much money you make, but how much money you keep, how hard it works for you and how many generations you keep it for. It's easy to think that it's only when you have so much money, as a matter of fact, way much more money than you can handle, that you need to learn how to manage your finances so well. The truth is, if you don't learn how to manage your money when you barely make enough, you'll never know how to manage it when you make so much. You'll end up lavishing it. Jack Benny, an American comedian, radio, television and film actor once advised, try to save something while your salary is small. It's impossible to save after you begin to earn more. Not only should you begin to manage your money when you still earn so little, but you also need to start managing your money effectively when you are still young, in your 20s. So what's the first thing you need to know about managing your finance and how well can you manage it effectively? In this video, I'll share with you how to manage your money in your 20s. If you're new here, consider subscribing so you won't miss other interesting videos like this. 1. Learn About Finance Management The first thing you need to do when it comes to managing your finance is to learn everything you need to know about finance. Dave Ramsey, an American radio host, author and businessman, once said, financial peace isn't the acquisition of stuff, it's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this. When you understand financial terms and also know how to grow money to maturity respective of how much money you earn, you will be able to manage your finance as well. According to Robert Babson, an American entrepreneur, economist and business theorist, most people should learn to tell their dollars where to go instead of asking them where they went. You could start by reading a book, listening to financial podcasts or even reading some money publications. Just dedicate one or two hours daily for this. Learn about things like money management, investment for beginners, wealth building and the like. Note that even if you plan on getting a financial advisor, you should still know a little about money management. It will help foster your relationship with them and also help you make some good money decisions alongside your advisor. 2. Figure out your financial flow and control spending. Financial health is built on responsible spending. You see, it's not about how much you earn that will determine if you'll be wealthy, but how much money you keep and how well you can control your finance. This, however, doesn't mean that you shouldn't work toward creating several streams of income and increasing your income. It means that you should focus on controlling your spending. Charles A. Jaffe, a Belarusian-American chess master, said, It's not your salary that makes you rich, it's your spending habits. Also, according to Robert Kiyosaki, it's not how much money you make, but how much money you keep, how hard it works for you and how many generations you keep it for. The question now is, how do you control your spending? This is where figuring out your financial flow comes into play. Have you ever heard of the term budgeting? That's probably one word most people prefer to shy away from because of the self-sacrifice and frugality that budgeting allows a person to carefully consider. The truth, however, is that budgeting is important if you truly want to manage your finance. While you might not approach it from the angle of dealing with so many numbers and the like, you can use the 50-30-20 rule, a rough guideline to help you direct your money more purposefully toward your goals. Start by making a list of your income sources to give you a good idea of what you have coming in from time to time, either daily, weekly or monthly. Once you have that, then you can divide your expenses into these. Number 1, 50% of your income should be on necessities such as home, food, transportation, bills, etc. Number 2, 30% of your income should be for your wants such as travels, skincare treatment, etc. Number 3, 20% of your income should be dedicated to savings and paying off debt. This makes for a pretty simple budget, right? Edmund Burke, an Anglo-Irish statesman and philosopher, one said, If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. Number 3, start saving. Now that you have your finance well sorted, with a particular percentage allocated to savings, start saving. Will Rogers, an American actor, newspaper columnist and social commentator said, The quickest way to double your money is to fold it in half and put it in your back pocket. Because there are several things to save money for, it might be a little overwhelming and difficult to decide what to save. A good start, however, is to build an emergency fund for unexpected life events such as unexpected medical costs. Your emergency fund should be large enough to cover 3 to 6 months worth of living expenses. Start small, but be consistent. The goal amount doesn't have to be static. It should rise or fall as your circumstances are. A good start, however, is to build an emergency fund for unexpected life events such as unexpected medical costs, car repairs or even a lost job. It should rise or fall as your circumstances change. Once you have your emergency fund covered, you can begin to save for other reasons, such as retirement, purchasing a property or a car, investing, etc. Number 4, start investing. Once you're done paying off debts, building your emergency funds, then you should consider investing. It sounds like a lot of financial responsibility, but it's one that will pay off in the future. That you're still young doesn't mean you can't start investing now, especially because you have compound interest to your advantage, earning money on top of the money you earn. So, the earlier you start, the more money you can earn every passing day. Carlos Slim, a Mexican business magnate and investor said, anyone who is not investing now is missing a tremendous opportunity. Always remember that the time to start building good money habits and effectively managing your money is now when you are still young and don't have so much money because learning how to properly manage your money now that you're in your 20s is a fail-proof plan to eventually build wealth. Thank you very much for watching our videos. If you like this video, watch more videos on our channel and subscribe. We love you.