Home » Online Income

The Right Way To View Personal Finance During Your 20s

10 August 2008 8 Comments

Personal finance concepts such as budgeting are lauded as the way to achieve wealth or the way to get rich. Thousands of personal finance blogs hope you will read their content in your pursuit of wealth. Experts like Suzie Orman try to sell you advice on TV and through books hoping you’ll buy into the idea that managing your money better will make you rich. Well, I’m here to disagree and to tell you that mastering personal finance concepts such as saving and budgeting will not result in you being rich. That’s not to say that these concepts do not play a factor in your pursuit of wealth. I’m going to explain why personal finance won’t make you rich and discuss the right way to view these concepts, especially in your 20s.

The Path To Riches

In a previous post, I talked about how a salary will not make you rich.  Today, we will expand on this concept.  As I mentioned in that article, managing your income and expenditures wisely is a great thing and is important, but it will not make you rich.  Our lives are built in a way that expenses rise as your income rises; therefore, most people will never have a significant surplus of money as a result of a combination of a salary and a strong money management strategy.

Having a strict budget and savings goals are important to simply stay afloat in today’s society.  Without these things, you can easily fall into the crowd of those drowning in credit card.  Simply avoiding becoming a member of this crowd is not your ultimate goal.  Your ultimate goal is to build significant wealth and break the cycle (that most cannot) of make more, spend more that simply keeps you afloat.

In order to break this cycle and create a massive jump in your wealth, you need to combine personal finances with a significant jump in income.  Without this jump in income, you cannot achieve your goals simply through prudent budgeting and other personal finance concepts.

Finding Your Income Jump

Simply promotions and raises in your career don’t result in a large income jump.  In order to land a large income jump, you need to hit a home run (or at least a triple).  This home run can come in the form of creating your own business and achieving a high level of profitability.  Or, it can come from out performing in some kind of sales job (performance based compensation plus home run like performance).  Or it can come through huge gains in some kind of investment.  There are many ways to hit a home run and achieve a large jump in your income.

Putting Personal Finance In Its Place

As a 20-something, it is important to take note of what has been discussed so far in this article; but, it is also important to be cognizant of personal finance concepts in the right perspective.  I like to think that personal finance concepts like budgeting and saving is the right approach to positioning yourself for building wealth.  Furthermore, this phase in your wealth building process is typically in your 20s; therefore, learn how to budget, save and manage your money now so that you are in a position to maximize a future jump in income and maximize all future wealth building opportunities.

So, what should take up most of your time?  Well, if you’re in debt and struggle staying afloat financially, then solve your current issues by focusing on establishing a budget and begin a savings plan.  If you have already conquered these aspects, focus on ways to increase your income.  Perhaps, you should begin working towards a second income stream that will substantially change your financial life.


To conclude, remember personal finance concepts like budgeting and saving are great when it comes to positioning yourself for wealth building.  Past that, it won’t do much to make you wealthy.  Once you are in a decent place financially, begin focusing on ways to increase your income.


  • Hustle Strategy said:

    That income jump is extremely important if you are not doing your own thing. Trying to hit the home run as you enter the job is a good idea as well. I was always told that to move up, job hopping was the way, either internally or outside of your company.

  • SBF said:

    To get a kick start, try these websites:


    I have ONLY looked around and never acutally used their services. I am not endorsing these, just have come across them in the past. I have read many good reviews of each.


  • Schahryar said:

    Useful, thanks!

  • Time Tracking said:

    Great outline – but don't forget about the benefits of compounded growth. By starting a savings and investment plan while you're in your 20's can lead to some significant returns by your thirties, and a very decent return in your 40's. In combination with your outline, it's entirely possible to say "good bye" to working by the time you reach your 50's.