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Navigating your 20s while keeping coin in your pocket is hard: There's your student debt, overpriced rent, trying to get your job to pay you top dollar — and the never-ending pressure to do more with less financially.
Here are 5 rules that don't require much thought — but that will seriously pay off by the time you're 30.
You can end up with nearly a million more dollars for retirement if you start saving at age 22 than 30.
You probably have lots of questions, like "What are your assumptions?" and "Um, do I need to be a rich AF 22-year-old saving a bazillion dollars a year for that to be true?" and "I'm 30, why are you making me sad?"
"How much do I need?" That's the first question out of every first-time homebuyer's mouth, according to Aaron Schwartz, a real estate agent with Branches Realty in Washington, D.C.
The rule of thumb, he said, is that you typically need 20% of the purchase price for a down payment, and can count on paying 2% to 5% of the purchase price in closing costs.
But many people actually need a lot less for their down payment. And — surprise! — they often need more for closing costs.
One rule of thumb on buying a car says you shouldn't spend more than 20% of your monthly take-home pay.
Experts warn that figure includes more than car payments: You must also factor in gas, insurance, and other costs.
My warning? That 20% rule is bull.
I followed it, and my car purchase still broke me.
Every personal emergency is a crisis in a different way — a job loss, a sexual assault, a car wreck — each taking a unique toll on your life. But all emergencies come at the same time: when you least expect it.
You know you're one botched bike-ride away from major medical bills and serious time off work. But are you actually ready for sudden expenses or an unexpected drop in income?
In other words: Do you have an emergency stash of cash?