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Financial Survival Guide For 20-Somethings & 30-Somethings

12 August 2011 18 Comments

Fear has re-entered the markets and the economy as Americans are overwhelmingly responding to polls that they fear the economy is getting worse and possibly headed back into a recession. Meanwhile we have record long-term unemployed which speaks to the structural nature of our economic woes (versus cyclical). Yes, it’s by no means easy to get ahead in today’s economy, but we’re here to deliver the financial survival guide for those of you in your 20s (or 30s for that matter). Let’s jump in…


Nothing at this stage is more important than your income. This breaks down into two areas: keeping your income and increasing your income.

Job #1 is to keep your income. In a down economy, losing a job is always a risk. Unemployment should remain stubbornly high for years so this is what you have to focus on first. Moreover, this speaks to the ultimate objective we talk about here which is not being dependent on someone else for a job, for income, for anything. More on this later…

You need to do what you can to position yourself that if your company has to down-size, you aren’t the one who gets the axe. This might mean talking with your bosses about the situation and letting them know that you’re willing to do anything the company needs in these tough times – just having this conversation might make your employer fire someone else before you. Do it tomorrow.

Next, you have to start putting pieces in play to increase your income. If there’s no upside at your current company, don’t fret, start putting pieces together for a move to another job / company and/or building additional income streams.  This is one of the things I talk about the most here on this site: building additional income streams. Increasing and diversifying your income is one of the best things you can do. Start exploring this tomorrow.

Continue your education

I’d guess that 90% of Americans get a job and stop their education. Their life becomes work from 9-5 then they go home and watch TV – you’ll never get ahead with this mentality. You need to continue learning both inside and outside of work.

First, find ways to expand your skills and experiences within your job.

Then, start using your free time to learn new skills and/or learn about the economy and the business environment. Expand your understanding of these crucial areas – they will serve you very well in more ways than you’ll ever realize.

As for skills, consider learning computer programming. Find tangible skills that are in demand and become proficient at them.

Personal Finance

You have got to find a way to dial back your lifestyle. Look, we’re in serious times as an economy. Whatever you thought was a good emergency fund or a good amount to put away each month, you need to double that possible. You need to get serious about protecting yourself from any one of a hundred possible events that it’s impossible to even foresee happening. Get out of debt and get some serious emergency cash. Do this yesterday.


If you’re good to go on emergency cash, you need to start investing. More than anything you need an investment plan, and this doesn’t mean “diversification.” If diversification is your investment plan, you shouldn’t be investing.

Start learning how investing works.  Start watching CNBC (with the understanding that every person on there are mostly idiots) so you can at least start getting a feel for the daily market action. Then, start following certain economists and analysts that you like. My favorite is Eric Janszen at iTulip.com. This process of learning how to invest takes years. For the first two years you’ll be a complete idiot. For the next few, you’ll still be an idiot most of the time. Then, after going through nearly every type of market over the years, you’ll start to get a feel for it.

Hopefully you’ve already started this process. If you haven’t, time to start now.

With regards to your investment strategy, you’ll never have one set in stone completely. It will change over time as you learn more and have more experiences. The important thing is not to change your strategy based on short term market movements. That is precisely when you STICK to your strategy.


Just by reading this, you’re ahead of the game. Most people out there don’t even consider this kind of stuff, and frankly, they’re gonna be up a creek when the next “crisis” hits – and it most assuredly will at some point.

Start getting your house in order and doing what we’ve discussed here.

Did I miss anything?


  • Steve said:

    I would add attack debt voraciously. If you lose your job but have lower/no debt obligations, you can take a lower paying job and still make it (or slip backwards much slower) than if you have a lot of debt. This allows you to take ANY job instead of waiting for a higher paying one which will have far more applicants.

  • Chris Yates said:

    I'd also it's important to focus on decreasing expenses in addition to increasing income in your 20's and 30's. It's so easy to go buy the expensive car, house, toys, etc. when your income goes up.

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  • Danielhendr said:

    I'm with Steve. Too much debt is want will ruin you especially at a young age. If your making 80,000 dollars as a couple, then live off of 40,000 so if someone loses their job you are okay. If you have kids, that will be harder but you can live with want you don't have if you never had it. Example being bigger home, nicer car, etc.

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  • @DavidGass said:

    Totally agree with continuing the learning. It's what you learn after you know it all that counts. Too many think they know everything about money when they need to spend more time focused on how to save money, make more money and get their money to work for them. http://learnfinancialplanning.com is a good site to keep learning along with this site.

  • Shayne said:

    This is article is very helpful for 20's-30's who have a job but is still lost on what to do next or what to do with their income. Cause aside from working to have something to put on the table..you'll still be wondering if there's more to life than just surviving everyday.

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