How to Manage Your Finances in Your 20s

Making the right financial decisions in your 20s can long-term give you a great lifestyle for the rest of your life. The following are some tips I've learned through seeking out people who were older and wealthier than me:

1) Find a mentor who is good with money.

You may have someone in your family who always seems to have money under control. This doesn't happen to people by accident. Take the time to listen to what they have to say.

2) Read books that increase your financial knowledge, including those traditionally geared for older age groups.

After awhile, you'll begin to notice trends that keep coming up over and over. You may not want to take the advice of every book at face value, but it gives you a great starting point to thinking for yourself.

3) Learn the concept of delayed gratification.

Short-term sacrifices can become huge long-term gains. Most people in society want things immediately, which is why most people are in debt their whole lives. Rich people often do things that average people find uncomfortable. If you take the time to live below your means and eliminate your debt in your 20s, you can easily be a millionaire by retirement (and retire younger) just by saving what you'd be paying banks in payments. At the very least, learn to stop borrowing money as a solution to your problems. It's not always easy, but it's worthwhile.

4) Find ways to increase your existing income.

Most people are raised to be employees, but it's not your only income option. Investments are good as well, with the realization that they usually only work long-term (5 years+) as opposed to short-term. Never invest in anything you don't understand. If you have no debt, a matching 401K through your job or a Roth-IRA are a good place to start.

Part-time businesses are also great to explore in addition to your job and can be transitioned into large income sources. There are a lot of great buinesses out there that take very little money to start-you just have to be willing to do the work and get things to the point your physical presence is not required for the business to work. There are general business books that can show you how to do this.

If you do this over and over again, you can see how business incomes can be "stacked" to create wealth. This is also known as residual or passive income, which can produce you both time and money if you're willing to do a few years of intense initial work. From a personal standpoint, this is what is helping me retire before I'm 30. I can't tell you what's on TV every night, but at this point I really don't care. Getting to do the fun stuff yourself instead of watching other people is great.

5) Don't be afraid of making mistakes.

I don't mean go out and do stupid things on purpose. It's just sometimes things happen that you thought would work out right but they don't. Instead of letting it bother and discourage you, learn from it and move forward.

I hope these tips have been helpful for you. Good luck and best wishes for your future!