Financial issues while you're 20's

Image from pop sugar

Every generation got a problem and a struggle. When you are young it gives you the ability  to make necessary changes but when you let your issues stay as it is and get out of control it will surely haunt you and derail your dreams.  There are numerous ways how to resolve it but identifying the problem will help us be in a really good position.

1. Brand obsession

Buying branded items are good but buying the same brand all over and over again whenever they release new products is totally outrageous. You are burning a hole in your pocket. Sooner or later you will have a bigger problem if you will continue this.  Being trendy is good but being financially savvy will be better. Practicality will keep you safe from trouble.

2. You want to get rich not be rich

Are you a pretender or a contender? Can you survive once you got an emergency? While you are young don’t just focus on your outside appearance, invest within yourself too. Many young adults keep on hopping in different industry looking for a higher pay so they can finance their lifestyle but they can’t sustain it in a long term. Invest in yourself, study another course. You need to simply change your thinking in being rich. A genuine rich person will never be insecure with their neighbors new phone, new car, new house. A rich person knows exactly their REAL value.

 3. Short term vision

If you got problem with your eyes it is really hard for you to move because you might get hurt. When your vision lacks clarity you are surely in trouble. You got a little problem if you have a game plan. How do you see your finances 5 years from now?  If you know exactly where you’re going then you will be in good shape. If not, then I recommend to think about that, before you construct your house and lay down the cornerstone you need to go back to the drawing board, have a blue print and put those ideas in paper. Try to read it everyday so it will sink in your system. Your vision might change over time but it will be better compare to not having one.

4. Go with the flow

One of the problem being young is the lack of experience and that is equals to shortage of wisdom. You are too busy following the norms and the culture without too much analyzing the effect of it  on the long run. When you follow every ones advice you will be lost. You need a game plan.  Don’t let other people’s lifestyle dictate your spending pattern. Don't be shy to tell them that's not on my budget because they don't care when you are broke.

5. Credit card sucker

 Every month you can’t stop using it. Even in simple items you need to swipe your card. In a culture that debt is normal and having no debt is considered a freak you need to wake up.  Let me tell you that most people who spend using credit card has issue with acceptance and security. According to http://www.psychologistanywhereanytime.com/

With the ever increasing access to credit cards, the number of people with a shopping and spending addiction is astounding.  While the exact number is not known, It is estimated that there are over 14-15,000,000 shopaholics in the U.S. and that the U.S. credit card debt is greater than six hundred billion dollars.

I have a very simple solution to that credit card spending. Throw your card and only buy using cash.

6. Too much reward for yourself

You have a serious problem when you try this kind of life style; travel everywhere, party anywhere, sky is the limit when it comes to spending. I just want to remind you that you are not a rock star or celebrity, but even celebrities go broke sometimes when they cannot sustain this lifestyle with low earnings over bigger expenses. Rewarding yourself is a great way to give you some boost but if when you strike the balance with reward and wisdom you will hit the jackpot with great repeatability.

7. No financial heroes

Having no inspiration is a suicide. Try to look for an inspiration or a hero. Someone who will help you to achieve your dreams financially like your friend who are successful and books that’s very timely to your situation. Remember that you can’t do it all. Even superman got kryptonite that sucks his power sometime. So when everyone around you spends higher than they earn you badly need to be the hero in that generation.

8. You hate the idea of saving

There are people who don’t have any idea why savings is good. For them, saving money is more on depriving yourself with something that you really want now. Yes, they are somehow correct but they should focus more on WHY we need to have savings compare to  focusing on HOW they should save. If you got no savings you cannot afford the future. All billionaires understand the value of having a really good buffer (Savings). They can easily move whenever they need and want to.

9. Voucher fanatics

I love the idea of vouchers with a really big discount but according to studies it will increase your spending habits. When you love buying things that you want you normally go overboard with your real budget because you think you can save more. The problem with the idea is you think that the promo won’t happen again. With the fear and greed that you got it will increase your chance to have a financial disaster.    

David Isaiah Angway is a Financial Evangelist

Important financial strategy



Image from Efficiency Time Table Matrix

Many people are currently lost and trying to figure out what to do with their finances. Some of them prioritize the things that they want but not what they need. While others follow the crowd or the fad. How about you, who do you follow?  

The Stephen Covey matrixis designed for time management system but this is also helpful when it comes to your finances. Once you treat your finances very  well you will surely reap those rewards because right priorities will be emphasize.

Quadrant I is for the immediate and important deadlines. This is the foundation of your financial house.  You start it brick by brick and this is a “must”.

1.      Have a vision, goals and budget  for this week, month and  year -  You need to sit down and have some blue print to achieve a solid structure of your financial house. Every house or a building started in a drawing board or in a piece of paper. You got to start right or else you will waste your time.

2.      Start having an Emergency funds – Once you are good with your budget try to allocate a portion of your salary for emergency funds. Make it 10-20% every salary. If you won’t do this and something happened, you will surely be in debt.

3.      Start getting  Insurance- You will die and we don’t know when and  how. Sounds morbid but that’s the truth. You need to have a protection so your relatives or love ones will not suffer financially.

4.      Focus on Long term Investment- Time is your ally when it comes to investment. Procrastinate on this and your future will be dependent with Social security benefits. Imagine, as of this writing SSS can give you a max of 9000 per month. Can you sustain your lifestyle now with a rising cost of goods once you retired? 

5.      Pay your debts or totally get rid of your credit card - If you think credit card is for emergency, think again. Sooner or later you’ll end up a slave of your own behavior if you continue thinking that way. However, you can easily reach your financial goals by removing those consumer debts. Practice discipline and never run away from your responsibilities. 

Quadrant II is for long-term strategizing and development.

1.      Read books and blogs about personal finances- When you invest in books and you follow the principles the rate of return will be huge. It will cost you a lot once you rely on your personal experiences. Get a guidebook about personal finance since it will be more efficient to follow a system that’s proven and tested. 

2.      Plan your budget - Don’t fall in love with the first budget plan that you made. Always make necessary adjustment. Do it every week and evaluate your behavior towards your spending pattern. Your good habits will put you at the top.

3.      Attend financial seminars- When you have time and money never miss the chance to simply listen to the leaders of the personal finance industry. Parallel to that is if you love attending live concerts the experience is really different. Increase your knowledge and you will save yourself from a crisis.

4.      Get a financial coach  – Financial coaches want you to win but if your parents, grandma, neighbors are your financial coaches but they are currently in a financial woes  please  think  carefully about their advices. You need to seriously talk to someone  who is credible and who can walk the talk.

5.      Listen to a free podcast about finances- At this the age, we are so privilege to have so much information on the palm of our hand. While you are traveling you can use those apps in your phone for free to enhance your skills. Instead of wasting your time in a traffic jam you will be empowered when you focus your brain to something that’s going to make you better in a long run.

6.      Virtual shopping  for financial products like insurance,  mutual funds and stocks- You can maximize your money whenever you compare prices since almost all financial products of different companies are uploaded on their site. Do your due diligence and you will win long-term. 

7.      Check the investment options you got according to your  risk profile - Not all investment instruments are for you. It should be suitable to your needs and aligned with your goals. It might be urgent but it is important to see all the options first to make proper decision. When you cannot explain the investment that you would like to enter you may be scammed.

8.      Career planning- There is a study that Millennials (1980-2009)  is the generation of hoppers. Most of us can’t stay in a job for more than 10 years compare to the Baby boomers and Gen X. Remember that there will be a lot of seasons in your career.  Make sure you are totally prepared for the change.

Quadrant III is for time pressured distractions. They are not really impor­tant, but you badly want it now.

1.      Buying the newest gadgets, HD TV using a credit card - Many people fall into this trapof consumerism. Newest iPhone, Samsung or latest gadget is the vices of this generation, but this is just a distraction. Not really important. The kid inside you is being unchained especially when you see the 0% using the credit card installment.  Dave Ramsey said  “if you can’t buy it in cash, you cannot afford it.”

2.      Buying a vehicle for the sake of status quo - You think that wants and needs are the same. Big no! Buying a car that will help you to minimize your cost is good but remember if you bought a car because you think it is cool to have one is a worst idea, it will derail your  finances. Your savings and investment with no additional  cash flow won’t be sustainable to achieve your goals. 

3.      Buying a condominium or a house  without a plan – 30 years of payment terms is good but 15 years or 10 years payment is way better because of the fees, but before you buy you should  ask some questions like is this really important or can you just deprioritize it for another year. Planning should help you determine this. Refer to Q1 and Q2.

4.      Buying an item that will just pile up on your place. Have you ever bought a lot of shoes, books,  and things that you don’t really need but you think you will need it someday? You are a victim too of “I like this” mentality. It reminds us of our inner child. We buy something using our emotions and justify it with logical reasons. 

Quadrant IV is for those activities that yield little  or less value. These are activities that are often used for taking a break from time pressured and important activities.

1.       Watching TV series for too long. – Anything that kills  your time is not a worthy activity. Too much is not good at all.

2.       Addicted to online and phone games. Many are guilty with this and being addicted means someone can control you, not you controlling them.

3.       Sleep more than 12 hours a day. When you sleep it lets your body to recover but if you hibernate like those polar bears then you are wasting your time and that is counter productive. If you want to be successful you need to be a doer not just a dreamer.

4.      Going to Starbucks as the extension of my home- When you spend time in Starbucks or Coffee bean you tend to fall in to the “latte expenses”.  If you will compute everything that you spend just for coffee. You will hate yourself with the realization of you put all those money down the drain. 

5.      Facebook for more than an hour just checking the news feed-  The social media is  a good tool in marketing. If you are a digital marketer or you’re building your brand that creates revenue for you. Spending time with it for too long waiting for your friends latest posts is disrespecting your time. You cannot regain time which results to money lost.

Live like no one else so you can live like no one else- Dave Ramsey

David Isaiah Angway was a former fraud specialist and a Registered Financial Planner who currently helps young, urban and educated millennial (Gen Y) set and achieve their long-term financial goals by educating them about investments, asset allocation, risk management, retirement planning, and estate planning. His role as a financial planner is to find ways to increase the client's net worth and help the client accomplish all of his/her financial objectives. 

Diagram Source: Steven Covey, A. Roger Merrill, and Rebecca R. Merrill, First Things First (New York: Simon and Shuster, 1994), 37; James Cooper, “3 Vital Time Management Principles for Small Business Owners & Entrepreneurs,” mimosa PLANET, December 2, 2010, accessed February 4, 2012,

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