The balance between enjoying your 20s and being fiscally responsible

Many articles that target younger generations are pretty strict when giving financial advice. One may suggest to cut spending by removing all restaurant and alcohol spending every month. I will admit – for the people on verge of bankruptcy, this is sound advice. That person definitely needs to cut costs as quickly and efficiently as possible, and eating/drinking out is a luxury they cannot afford.

What about the majority of people who aren’t in bankruptcy? How should they balance spending and enjoyment? As someone who grapples with this balance on a daily basis, I’ll share my advice and insights based on my own experiences.


You must invest in your relationships – romantic and otherwise

Your 20s are a very important time for maintaining the relationships you’ve gained growing up. These are the friends you hope to keep around, and as everyone gets busier with their own lives it will become more difficult to maintain meaningful connections. So, now is a perfect time to invest in those relationships.

You will need to invest quality time with your friends, but sometimes that will cost money (road-trips, outdoor adventures, brewery runs, sports games all add up over time). You can’t be afraid to commit some money to spend time with the people that make you happy – that will always be a worthwhile investment.

Obviously, this depends greatly on your financial situation. If your friends are planning an all-inclusive trip to Cancun at $1200 per person, you may need to reconsider that offer. But if you are on the fence about spending $30 to visit a friend 100 miles away who you rarely get to see – consider spending that $30. It will be worth it.

You need to grow your money so you can spend now and later

This is a good time to sit down and either do a lot of research or work with a financial planning to define what you want your retirement to look like. Once you define what “living comfortably in retirement” looks like, you can start funneling your paycheck each month to a retirement plan. It’s vital that your personal-luxury expenses do not dip into your retirement investment. You need to set yourself to have fun now and later, unless you expect to work your entire life.

If want to net-zero, get a side hustle

One of the benefits of being young is having the energy to do more throughout the day. If you still want to go to the bars every Saturday night with your friends but want the same amount in your bank account every week, you can find ways to supplement your normal income to offset your spending.

Find a side hustle that keeps you interested and engaged, and you will be able to enjoy luxuries as much as you want – as long as your net-spending is below your personal target.