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A Boot Camp for 20-Somethings

It’s time to get your money in order.

Maybe you’re a 20-something who is struggling to make ends meet, or perhaps you’re settling into a job that is finally providing you with financial stability. But no matter your circumstances, what everyone has in common is the desire to make the best financial decisions.

This week, we’re going to help you begin.

It would be nice if there were an all-encompassing course that prepared us for this crucial aspect of our lives — something like Financial Adulting in American Capitalism. But we’re often left to figure it out on our own. How do you cover your expenses on an entry-level salary? Should you focus on paying down student debt instead of saving for retirement? What kind of health insurance do you need — and how much should it cost?

Our five-day financial boot camp will help you sort through all of these big issues in digestible bites. Each day, we’ll ask you to complete one small task that will nudge you in the right direction. (Today’s action item will appear at the end of this note.)

Your guides will be Ron Lieber, the Your Money columnist; Tara Siegel Bernard, a financial reporter; and Mike Dang, the personal finance editor. Together, we have more than a half-century’s worth of experience writing and thinking deeply about these topics.

And we all survived our twenties.

  • Think about the aspects of your financial life that give you the most anxiety and those that give you the most hope. Write them all down and make a list of things you want to improve or optimize. (And it’s totally OK if you’re overwhelmed and don’t know where to begin; that’s where we come in. We’ll give you plenty of ideas along the way.)

  • Make sure you have a copy of your paycheck handy, and then make a list of all of your active financial accounts, along with their user names and passwords. These may include: checking, savings and other bank accounts; all student-debt-related accounts; budgeting apps; 401(k) and individual retirement accounts; and health insurance.

  • Do you have a burning question about money you want answered? Ask us here.

Before we dive in, we want to share a glimpse of what our 20s was like for us.

When I was in my early 20s, I had just completed a graduate degree in journalism and was working as a researcher and fact checker for less than $30,000 a year when the U.S. housing market collapsed and the Great Recession followed. I had about $70,000 in student loans, which I had begun trying to pay off while also helping my immigrant parents with some of their bills. A lot of people were suddenly losing their jobs and homes — it felt like such a dark and frightening time.

I didn’t know a lot about money, but I wanted to learn. I wanted to make smart decisions but I also wanted to feel like I could make a few financial mistakes occasionally without beating myself up about it. I put a few trips I couldn’t afford onto credit cards, reasoning that I had to live a little while I was young and untethered. This was also around the time that Suze Orman, one of the biggest names in financial media, had a television show where she told people whether or not they could afford things they wanted. I had nightmares in which she yelled at me for wanting anything that wasn’t food or shelter.

How do you save for retirement when you’re also trying to pay your monthly bills, get rid of your student loans and help out your parents? This is the kind of question I asked myself, and eventually answered, while I was in my 20s and reading stuff like this very newsletter.

When I think about my first decade of work, from 1993 to 2003, I mostly feel grateful.

I lucked into cheap rent — $260 for the second-largest room in a five-bedroom house in Somerville, Mass., and then about $600 for my share of a perfectly nice two-bedroom in Brooklyn, discounted because it was on a loud street less than a block from a jail.

I lucked into an employer, Time Inc., in 1994, with a 401(k) plan and a matching contribution. There, I was fortunate to run into a colleague one Saturday afternoon when we were the only ones in the office. Feeling chatty, she showed me her 401(k) statement — six figures — and urged me to get with the program.

I lucked into a father who was an Army veteran and a customer of USAA, a bank that mainly serves U.S. military members. The bank’s magazine printed the first graph I’d ever seen that showed the power of compound interest. Start young and save as much as you reasonably can, it advised. I did.

I lucked into a college with generous financial aid. I graduated with $8,000 in student loan debt and was able to afford the repayments, even on a journalist’s salary in New York.

Skill would come later, but I don’t give myself too much credit for the book learning I acquired, much of it on the job. That, too, was a kind of great luck, being able to work at places where experts would pick up the phone and talk to me.

“Try to get lucky” is not particularly useful advice, but it matters more than many skilled people acknowledge.

Take a trip back with me to the late ’90s in New York. Bill Clinton was president, Rudy Giuliani was mayor and I landed my first job out of college — as a reporting assistant — for roughly $32,000 a year. Dot-com stocks were all the rage.

The real estate market was on fire, or at least it felt that way to my 20-something self trying to rent an apartment in Manhattan. You had to show up at bustling open houses, checkbook in hand, to cover your credit report and deposit. I eventually landed in a teensy, rent-stabilized studio in the West Village for $877 a month.

I remember writing out my monthly expenses on a notepad, trying to figure out how I was going to make it all work on my take-home salary. I probably saved enough to get a 401(k) match, but not much more.

There wasn’t a ton of wiggle room anyway, and larger expenses — a laptop, vacations — sometimes landed on my credit card. It didn’t feel frivolous, but it didn’t feel good, either. Those days served as some of my foundational money lessons.

I’m not sure how much I would change about my 20s, even if I could. But I do wish I had been able to see a little bit further out, past that particular moment — perhaps even taking some more financial risks.

Tuesday: Meeting Yourself Where You’re At: Whether you’re a student, looking for a job or working, we have some tips for you.

Wednesday: Budgeting for the Haters: Budgets are a statement of values. Once you see them that way, examining how you spend becomes a kind of centering exercise.

Thursday: Managing Debt: How to think about paying off debt (without all of the shame).

Friday: Thinking About the Future: Saving, retirement and coming up with reasonable goals.

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