Give Me Back My Five Bucks

10 Financial Commandments for your 20’s – Part 1

I came across an old post from Kiplinger that I had bookmarked: 10 Financial Commandments for your 20’s. And as I close in on another birthday, I decided to take a look at the list to see what I have accomplished so far, and what I still need to do.

Here is my review of  the first 5 commandments:

1. Plan ahead. To get where you want to go in life, you need goals and a plan to reach them. Having neither is like driving a car without a steering wheel — with your eyes closed. Start by asking yourself what you want in your future. Think about the short term (five years or less), medium term (five to ten years) and long term (20-plus years).

While I would consider myself to be a pretty good planner, I wouldn’t necessarily say that I know what I want in the future. It’s kind of scary to think about, isn’t it? But I’ll give it a shot.

In the next 5 years, I’d like to continue to aggressively pay down my mortgage, go traveling for an extended period of time, and try my hand at becoming a full-time freelancer. In the next 5-10 years, I’d hopefully like to be married with children, living in a different city, and holding down a somewhat successful career. In 20+ years? Well I hope to continue building my wealth so that I can continue on my path towards financial independence, and retire early. In 20 years, I’ll be 48. And when I’m 48, I’d like to seriously consider retirement. It might not be possible that early, because 20 years is not that far off. But definitely my #1 goal is to retire before 55.

2. Live within your means. Can’t afford something? Don’t buy it. Sounds simple, but too many people have a heck of a time following this one and get in over their heads in debt. Learn to keep spending in check while you’re young and you’ll save thousands of dollars over the years — and save yourself a lot of stress, too.

I’m thankful that I learned to live within my means while I was in my mid-20’s. I’ve struggled in the past few years with trying to strike a balance between spending and saving, and I think that I’ve finally figured myself out. It’s a good feeling to finally understand what I value in life, and to have the knowledge that no amount of handbags or jeans or fancy restaurant meals will get me to where I want to be, and what I want to achieve.

3. Make saving a habit. You work hard for your money, so when your paycheck arrives, why not make yourself the first person you pay? Arrange with your bank to automatically divert part of your paycheck every month into a savings account. That way, you won’t have to remember to transfer the money manually, and you won’t even miss it when it’s gone. Out of sight, out of mind.

Every bi-weekly pay day, my bank automatically transfers the following away into various savings accounts:

  • $375 RRSP & TFSA ($9,750/year)
  • $50 non-registered investment ($1,300/year)
  • $100 Emergency Fund ($2,600/year)
  • $400 Savings – general, travel, house, car ($10,400/year)

Because my automated savings are only based off of guaranteed income (and I can usually scrounge up some freelance work every week), I usually save more than that. But at the very least, that is how much I’m putting away. I fully agree with the advice that every 20-something should learn how to pay yourself first. If your money is automatically being transferred out of your account every pay day, then you won’t even have a chance to spend it. It might be hard at first, but as Preet Banerjee said, we are really great at adapting.

Now, I know that I should be increasing my RRSP/TFSA savings, and once my Emergency Fund hits the $10,000 mark (hopefully by the end of next year), I will funnel the extra money towards my Retirement Portfolio. And based on my income going forward, interest rates, and my general comfort level, I want to keep adding more into my RRSP/TFSA accounts.

4. Pay off your credit cards. If you have a credit-card balance, now’s the time to rid yourself of that albatross around your neck. Set a goal to pay off all credit-card debt before you turn 30 and have other financial responsibilities to tend to.

I think this is a terrific goal to be free of credit card debt before you turn 30! I consider myself to be extremely lucky not to carry a credit card balance right now, even though I did so for years and years. I think once you get in the habit of having credit card debt and not paying off the balances each month, you can get really comfortable with your debt. And that’s not a good thing at all. Debt felt normal to me for many, many years. And now that I’m debt-free (aside from my mortgage), I feel a lot less anxious and stressed out.

5. Start investing. The sooner you start investing for retirement, the less painful it will be and the more money you’ll accumulate.

This is a category that I really need to work on. As of right now, my Retirement Portfolio consists of indexed e-series mutual funds. That’s it. Nothing more than that. A huge goal of mine before I turn 30 is to figure out this whole “investing” thing. Or at least start to learn. There’s so much information out there, and truthfully, I feel a little lost. But now that I have my savings and spending under control, this is definitely the next step for me.

How are you doing with the first 5 commandments?

Next —> Read Part 2 of the 10 Financial Commandments for your 20’s

Author: Krystal Yee

I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.


  1. Maira says:

    I wish I would have read something like this 8 years ago! I am in my late 20’s and have only been abiding by these commandments for the past couple of years. I came to the realization that my 30’s were fast approaching and I was going to have NOTHING to my name when that point arrived. I’ve been aggressive with my savings, paid off all debt, and got an Amex Gold Card so that I am obligated to pay off any balance that I accumulate each month. We all need a little credit here and there… but we don’t need to roll debt over month after month! Thank you for sharing… I can’t wait to see how I am doing with #’s 6-10.

    • Krystal Yee says:

      I wish I had read the 10 Financial Commandments about 8 years ago too! Although, the me 8 years ago probably would have just ignored the advice anyway.

      Good for you for taking the steps to get on a good financial path. :)

      • Maira says:

        Hey, it’s never to late to break bad habits! I’m so glad I came across your blog (through Consumerist). It’s so refreshing and less daunting to get advice from someone in my own age group, as opposed to some 50 year old financial guru that speaks with words my brain can’t even comprehend… the only bad part is that I just read your post about cancelling your Amex. It has made me slightly paranoid and I’ll probably be checking my online statement 10 times per day going forward.

  2. Tiffany says:

    I would say that a big thing would be not to even get credit cards if possible they only cause you unwanted or needed bills. I have found the key to making savings a habit is to not see the money in the first place. have it directly put into your 401k or separate savings account so you dont count it as money to spend.

    • Credit cards definitely need to be used carefully, but I don’t think a blanket “no credit card” is right for everyone. I love my credit cards – and the rewards they give me! In fact, thanks to a card with British Airways promotional miles, I got 2 round-trip flights from US to Latin America for under $500.

      I’m with you 100% on the automatic deposits. It’s so much easier to have the money go straight into my 401K or savings account instead of relying on my willpower to save what’s left over at the end of the month.

      • Krystal Yee says:

        I definitely agree. While I think credit cards can be dangerous, if you manage your spending properly, you can really get some great rewards from them. I try to put all of my purchases on my credit card, and pay off the balance right away.

  3. Laura says:

    Ooo I love posts like this, following steps etc…
    But as for how I’m doing on these, I’m working on them all! I have plans for the future, but some are pretty vague. I do have a budget, but sometimes it slips :(. I do pay myself first when it comes to saving!! The credit cards are my biggest hurdle, slowing paying them off! As for investing, I let the banks to that for me… for now.
    Thanks for the great post, looking forward to the next 5 commandments!

  4. I think I’m doing OK on all 5 recommendations. But if “home ownership” or “being debt free” is on there… I wouldn’t qualify! One thing I’m very grateful for is that I started investing when I was in my early 20s. It’s a great feeling to start putting money away and know that I’m doing something good for myself.

  5. Sarah says:

    These are great points – if you wouldn’t mind, I may even borrow them for my blog!

    I’ve never really been much of a follower of finance…until I landed a job at an accounting firm and had to pay attention in a hurry! But since getting married, I am realising how important it is to have financial goals and then WORK for them!

    • Krystal Yee says:

      Yes, definitely feel free to borrow! Although, I can’t take any of the credit – it was Kiplinger that came up with the 10 Commandments, hahaha. :)

      Totally agree about how important it is to have financial goals. Especially when you’re in a partnership with someone, and their financial well-being is directly linked to yours.

  6. Leigh says:

    I’m pretty good at financial planning, but not so good at life planning. That’s something that I’m working on. I’m realizing that it’s difficult to plan my career when I don’t know what I want to do in life. I’m doing pretty well on the other ones and I never had credit card debt. After I finished university, I finally started investing and it’s certainly been an interesting experience.

    For #5, Start investing, you say “This is a category that I really need to work on. As of right now, my Retirement Portfolio consists of indexed e-series mutual funds.”

    It’s not a bad thing to have your entire Retirement Portfolio consisting of indexed e-series mutual funds. Do you subscribe to the Couch Potato philosophy? I personally am not interested in picking specific stocks and like having an entirely-indexed retirement portfolio. It makes things pretty easy to keep in balance and understand what’s going on.

  7. Mznatural says:

    I love these and am 31 and yea learning these things a little late. Although these are definitely applicable to anyone in their 30s would you consider creating a 10 commandements for your 30s?

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