Just Starting Out? Top Money Tips from Top Finance Writers

Four of us weighed in on it, with different perspectives.

It’s likely partly due to our age differences. Charlie Brown and Ben Le Fort are youngest, in their late 30s, Jason Clenenden is into his 40s, and the oldest of the bunch, I’m (barely still) in my 50s.

But I think the real differences have more to do with our individual life paths and circumstances.

I’d say Charlie is the boldest of us, having chosen to sell everything and move abroad to follow her (and her husband’s) dreams.

I did something similar, but at the time of my move I had very little, so I wasn’t risking as much. I was 30 and had less than nothing financially (though having a PhD gave me access to opportunities many others never get).

Ben’s story is compelling too, with challenges aplenty that he overcame through grit, hard work, taking some carefully calculated risks, and as I’m sure he’d be the first to admit, a decent helping of good fortune.

Jason tells a story of pursuing the American dream, only to realize the way most of us pursue it is more likely to turn into a nightmare. He turned off that beaten path as soon as he realized it, embarking on a far more promising one and finding success.

I find the differences between our tips are even more interesting than the commonalities, but I’ll let you be the judge.

The Common Themes

The two common themes in our advice are unsurprising:

If you’re just starting out, in your 20s or 30s, live below your means, and invest as much as you can for your future.

• Charlie says, “The younger you start to save, the less you will have to save in the future, so start right away.”
• Ben says, “maintain a low cost of living, pick up a side hustle, and invest every penny you can find.”
• Jason says, “It takes years to become financially free, so the longer you wait to start, the longer you will work a day job.”
• My advice? Start investing for long-term goals (e.g., financial independence) as soon as possible.

Next, two of us warn you not to get sucked into trying to ‘Keep up with the Joneses.’

• Charlie’s advice, “Don’t fall into the trap of lifestyle inflation if you begin to earn more money.” This refers to allowing your spending to go up as fast as (or worse, faster than) your income grows.
• My version is a bit more specific. Apply at least 50% of any income increase toward increasing what you set aside and invest. My personal target is 67%. Note this doesn’t require you to become ever more frugal. You can increase your spending as more money comes in, just more slowly than your income grows. Over time, this will increase your savings rate and speed you on your way to financial freedom.

The Differences Are Mostly a Matter of Emphasis

There isn’t any advice in what you’ll read below that I disagree with. Mostly, it’s different emphases.

Charlie, true to her life path, speaks of self-reliance and flexibility. In her own words:

• On learning financial savvy: “Educate yourself as to the best place to store your money for you. Don’t just expect your employer or your parents to know best.”
• On listening to your heart, and being ready to pivot when it’s time to do so: “Don’t think what you want now is what you’ll want when you’re older. And don’t listen to what the status quo tells you to do if it niggles you. I see too many people lock themselves into situations when they’re young, only to find it doesn’t work for them when they get older.”

Wise words indeed!

Ben advises you to “House hack!”

This could be sharing a house with housemates to save on one of the “big three” budget items – housing. It could instead be what Ben most laments having failed to do – buying a multi-unit house instead of a single-family home, living in one unit, and leasing out the other units to renters. This could turn your housing expense into an actual income source, as the rent from the other units may more than cover your mortgage and other costs.

Sure, this takes both courage and capital (multi-unit houses cost a heck of a lot more than a single-family home, let alone an apartment).

It also means taking on the responsibility of finding good renters, and the risk of not finding them, or worse, taking in bad ones.

However, if it works well, it’ll make you financially free much sooner.

What does Jason emphasize? Investing wisely, and gradually improving on that wisdom. Specifically, “Start learning about investing NOW. Use low-cost index funds until you find something that you enjoy and understand that can do better. Then FOCUS on that until you have built up wealth, with a goal to convert your wealth to income at a certain stage (which would likely mean a change in assets or strategy).”

My emphasis is on avoiding the trap of high-interest debt. My own worst financial mistake was buying more car than I should have, with more money I didn’t have than I should have, at higher interest than anyone should have to pay.

Thus, my advice is, to avoid high-interest debt (e.g., credit cards) to buy anything you can’t or wouldn’t buy if you had to pay cash unless you absolutely need it (e.g., medicines, food, etc.), have no other way to pay for it, and have a plan for how you’ll quickly repay the debt without digging yourself any deeper next month.

The Bottom Line

All of us advise those of you just starting out to do whatever you can to avoid debt, and to start investing for the future as soon as you can. Charlie and follow that by encouraging you to avoid lifestyle inflation.

Each of us then emphasizes a different aspect of personal finance as the other important piece.

I urge you to avoid the drain of high-interest debt. Ben suggests house-hacking as a major way to cut your expenses and increase your savings. Jason’s advice centers on educating yourself on investing and implementing that knowledge as it develops. Charlie tells you to listen to your heart and to not count on others to tell you what you need to know. Given how the majority of people don’t do well financially, they probably don’t know enough to teach you the things you need to know.

Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.