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Financial Tips for Young Adults – The Best Decisions During & After College

Posted On August 19, 2023 By Peter In

If you are a college student or person in their twenties, you could easily become a multi-millionaire by the time you retire. And it’s not by “getting a high paying job” or a certain degree. Indeed, you could get a minimum wage job and still retire with ten million dollars by applying a few simple habits. And if you’re interested, keep reading! I will prove the math behind everything I’m saying!

But I’m going to warn you: Most people your age won’t do any of these things. And why? Because the corporate world spends billions of dollars in advertising to entice you out of these simple habits!

Now, if you missed my blog: “How to Manage Money (so it doesn’t manage you),” be sure to read it here. I explain all of my time-tested “Financial Rules of Thumb” that can alter your life.

But specifically, what should be the priorities of young adults? What are the biggest mistakes they make financially? And what small habits can they make now that will change everything for their futures?

Yes, the “real world” has a lot of irritating additional responsibilities, like leases, insurance, etc. But when most young adults get their first full-time job, they’re often thrilled because: They’ve never made this much money in their lives!

Naturally, young adults tend to start at the “bottom income bracket.” Yet, you have an asset that’s ten times more powerful: TIME on Planet Earth.

For example, if you could put $25,000 into investments by the time you turned 25 years old, you would have over 12 million dollars by the time you retired! The interest alone would be $120,000 a year. And this would happen even if you never added a single dollar after age 25!

Then, why are so many young people sinking hundreds of thousands of dollars into a college education? Why don’t we just invest our money? Well… These are good questions to ask!

Thankfully, I happened to have a lot of financial mentors in my life when I turned 20. And as a result I’ve been experiencing many of the benefits of compound interest – not because I’ve had a high-paying job – (ministry is not the best vocation if you want to make a lot of money haha) but rather because, I prioritized the right things in my early twenties.

So, the things I’ve learned, I now pass onto you:


  • Drive Used-Cars (older than 5 years) – and only buy them in cash: Carolyn and I made the decision to drive junkers until 30 years old. Indeed, if I had a car-loan when I planted Substance, I don’t think we could have afforded to plant our church! In fact, there was a couple who wanted to move with us to plant Substance, but they couldn’t because they had just bought a new car and couldn’t afford the change! When we hit 30 years old, we upgraded to “five-year-old used cars” for a while.

But why is this so important? Because cars lose 60% of their value in their first five years (just think $20/day). Now, do older cars have more maintenance issues? Sure. But usually, it doesn’t cost more than $2000/year – which is way cheaper than the roughly $9000 a year (which is what the average person with a car loan & a newish-car pays). The same could be said for furniture. We decided to stick with hand-me-downs and cheap freebies – like those blemished discounted tables at IKEA.  And did our friends always have nicer furniture than us? Yes. But, if you live like no one else now, you can live like no one else later!

  • Get $14,000 in mutual funds by the time you turn 25. Even though your first full time job is probably at the bottom of the income bracket, it’s still probably more money than you’ve ever made up to this point in your life. And so I tell young people, this is your moment to save, save, and save! $3500 a year is a perfectly reasonable amount – as it’s probably not more than 10% of your income. I tell people: Live on 80%. Give 10% to God and put 10% away.

But how do I start investing? Well, there are a million financial counsellors who can sit you down for free and teach you how to start a retirement account. (Just ask any older person for a recommendation). Even if you never added another dollar, this would mature into 2.5 mil by the time you retired! Not bad, right?

Now, will you feel silly next to your friends who have nicer stuff than you? For sure! But it’s temporary. If you live like no one else now, you will live like no one else later!

But my wife and I took it to the next level – which leads to our next tip:

  • Prioritize a Home Down-payment over Food & Travel: I’m always a bit shocked when I hear how often young people are going out to eat or traveling internationally. It’s almost like a lot of young people have forgotten that these things are luxuries not necessities. Part of this is because baby boomers (who comprise the vast majority of our parents) are in fact the wealthiest Americans who have ever lived in American history. In fact, economists estimate that it is statistically impossible for any other generation to accrue as much wealth as they did. (See my blog on this). And what this means is simple: we all have “rich-kid” first world problems! Many of us grew up with a first-world lifestyle-expectations that are holistically unsustainable – at least in our 20’s.

So, throughout our 20s, Carolyn and I made the decision that, until we saved up a down payment, we would restrict our food and travel budget to a ridiculously low number. And did all of our friends make fun of us? Yes! My nick name was the “cheap-bastard.” But, guess who’s jealous now? And guess who can afford to travel now?

My first home looked so junky it’s almost downright laughable. But, when I flipped it a few years later I made $25,000. On my following house, that $25,000 quickly grew into $50,000. Of course, after the housing market went bust, we lost a huge amount of equity (which is why it’s wise to have 20% equity in your house).[i] but even still, we were doing way better than our friends who were stuck in a constant lease situation (in which you’re throwing away 100% of your money.) The average home can appreciate by up to 14.5% each year.[ii] and over a couple decades, that equity quickly grew into the hundreds of thousands for me.

      Thus, it’s critical that you remind yourself:  Every dollar you spend in your 20’s on non-appreciating experiences can literally cost you $100 down the road![1] It might be common for your friends to buy new cars, new furniture or travel the world. But, if you put stewardship first, I can promise you, God will reward you with cheap (or even free) vacations (Mt. 6:33).

  • Don’t fall into the wedding trap! Again, every dollar you invest in your 20’s can produce $100 by your late 50’s! So, don’t rob yourself of your greatest chance to build equity! The modern American wedding is nothing more than a pyramid scheme designed to cheat young people out of future assets. As a guy who’s approaching 50 years old, I can say: You won’t even like ½ of the people at your wedding when you’re my age (at best). And yes, my wedding was very humble. (We had a jazz band in the gymnasium of our local armory – with a Packer game playing in the corner). It cost us $4000. Her wedding ring cost me $250. But guess what, for our 25th Anniversary, I bought my wife a gorgeous new ring and a gorgeous house we can host weekly parties in. And I don’t feel bad about it whatsoever!

But allow me to end with a giant question:

WHAT ABOUT COLLEGE DEBT?  How much college debt is too much? Remember, Universities and Colleges are businesses designed to make money off of you. They will tell you all sorts of misleading stats about “all the money you’ll make” by having higher education. But those stats are incredibly misleading when you dig into them. Many degrees have zero return on investment. And it’s rare that schools will prove their “R.O.I” or job-placement percentages.[2]

Thus, here’s a new rule of thumb:

 Your student loan payment after graduation should be no more than 10 percent of your monthly take-home pay.[3]

If you are unable to calculate this, then you should probably be pursuing the absolute cheapest higher-ed option you can find.

So, here’s a better filter to have when you’re thinking about college:

The 3 most important decisions you will ever make: (1). Who is my master (Jesus); (2). What is my mission? (the vocation you will infuse with Jesus); and finally (3). Who is my Mate? (Who will help you fulfill God’s call on your life.). These three things are critical if you want to experience God’s blessings on your life.

In your late teens & 20’s, the greatest location for you is one that provides:  (1) an amazing church (that helps decision #1); a cheap education (exposes you to #2 with very little debt). And, (3). a vibrant and sizable community of Christians (decision #3) from which you can meet your spouse (if that’s what you want).

If you know exactly what you want to be when you “grow up,” then, find an amazing church filled with Christians who are making serious sacrifices for their future, nearby a solid university (in that order).

Now, obviously, this is not a blog about dating. (And if you want that, click here). But, if you want to “live out your dreams” then, find some dynamic Christians who are doing this, (in a place where you can also find a spouse), and earn the right to get around them! And if you can find a church filled with these types of people near some colleges that also offer a great R.O.I., then, you’ve hit the jackpot!

But one thing is for sure: Your 20’s are a golden opportunity to set yourself up for windfall gain later in life. If you live like no one else now, you can live like no one else later!

Thus, Jesus warned us: but the worries of this life, the deceitfulness of wealth, and the desires for other things come in and choke the word making it unfruitful.” Mark 4:18!

Don’t let your “desires” cut short your opportunity to change the world.

Want More?  See my Financial blogs:

Also check out: “Top Regrets of College Students” Part 1


[1] If you invested $14,000 in your twenties, and left it alone to accrue interest, you’d have a million dollars by your 50’s! You literally could live off the interest of this! So, when I say that every dollar can cost you $100, it’s not an exaggeration.

[2] R.O.I., means “return on investment.” I.e., They won’t show you the math regarding “typical salary in that field” compared to the cost of their exact degree in that field. And even if they do, they won’t necessarily tell you about “job placement.” I.e., Many jobs offer a high salary; but, there might only be one of those jobs per every 1000 applicants. I.e., if the job market demand isn’t high, that specific degree could ironically be useless. Fortunately, there is data out there that you can use to calculate this.



[i] first time home buyers can usually only save up about 5 to 10% as a down payment. But I always encourage people to put extra money into the principle of their house to get this number up to 20% so that if the housing market goes down, you don’t end up with an upside down mortgage.



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