Financial Decisions In Your 20s

May 22, 2006

MSN Money has a really nice personal finance section for those in their 20s. I agree that the 20s are some of the most important years of life because the decisions made during that time really impact the future. For instance, if a person chooses NOT to save for retirement during their 20s, they lose out on some critical compounding years, which makes it all the more difficult to save for retirement later in life. Take a look at the numbers for yourself with this calculator I created:

Retirement Savings Comparison Calculator

As you can see from this calculator, waiting just 10 years to start saving for retirement means that you have to save more than double your original amount. That’s something to think about.

6 responses to Financial Decisions In Your 20s

  1. I think there is a problem with “Expected amount at retirement age AFTER inflation” values… they match for both scenarios even when the value above them doesn’t match.

    Other than that, I really like the calculator!

  2. Yep, there’s a problem, but it’s a great idea for a calculator nonetheless!

  3. Yep, I don’t know what I was thinking. It should be fixed now.

  4. Wow, that is an eye-opening calculator. As a 22-year old who just graduated from college this past weekend and begin my job in a few months, I surely will begin saving right away. Thanks for the link and the calculator.

  5. This is great! Anything to promote starting your retirement savings immediately is a good thing. Once twenty-somethings realize what a difference it makes in the long run, they will be much more likely to begin contributions early.

Trackbacks and Pingbacks:

  1. Money Under 30 » Blog Archive » Some Motivation to Get in Financial Shape - May 22, 2006

    […] Thanks to AllFinancialMatters for pointing out this story from MSN Money featuring some average personal finance statistics of people in their 20s. For example, our median net worth is $7,901, but for nearly 25% of us, that figure is negative. We owe more than we own! These numbers are exactly why I created this site! Immediately upon graduation I fell into the trap of living like an adult even though I was earning like a graduate… A few years later and I am really in the hole. But as the MSN story points out, I am young enough to recover from my mistakes. With some planning and hard work I will be out of debt and have a healthy 401(k) before I turn 30. Obviously this site is all about how we can all do the same, but in a nutshell there are three rules that will be repeated here over and over again! […]