Six Ways to Best Manage Money in Your 20s and 30s | 'It Is Difficult to Get Rich for a Commoner'

Managing money can be tough, especially for those who just started their financial independence journey. While school doesn’t teach us about money management, there’s plenty of information available across the web and creators on social media often help out. One such creator/entrepreneur, Nicole Victoria (@nobudgetbabe) shared some crucial things to do for people in their 20s and 30s to get rich in their life.

Here's how to manage your money in your 20s and 30s

In the video which has over 559,000 views, Victoria, who claims to be a self-made millionaire, says that people aren’t at fault if they fail to manage money. She says nobody is taught how to manage their money. Thus, it is difficult to get rich for a commoner. She then goes on to share the six crucial things people need to do with their money to get rich. 

1. Calculating expenses

Victoria recommends calculating all the monthly bill payments and scheduling them on a calendar. She says the ideal date of payment should be the very next day the paycheck comes in. She says this will help people avoid going into debt due to a bill that comes up at the end or middle of the month. Further, the calendar will also help people to not miss any payment.

2. Building an emergency fund

An emergency fund or an “Oh Sh*t Fund” as termed by the creator can help people handle unexpected expenses without going into debt. Victoria recommends that this amount should be six times the monthly expenses of an individual or family. Thus, if the monthly expenses are $2000, the emergency fund should be $12,000. She then says the emergency fund should be kept in a high-yield savings account as it would earn good interest.

3. Using credit cards

Victoria says people should stop using debit cards for good as they are putting their money at risk. She says using the bank’s money via credit cards is always safer. She further recommends paying off the credit card balance every two weeks and not borrowing more than 30% of the upper limit on the card.

4. Understanding the time value of money

Victoria says that the value of a dollar today is more than the value of a dollar tomorrow. Thus, time matters when it comes to money management. The creator recommends that people should pay themselves too by setting up automatic payments that go towards their goals. She says one of these goals has to be investing, and one payment should go towards a brokerage account.

5. Figuring out financial independence number

Victoria shares the formula for calculating the amount someone would need to save to achieve financial independence. For this, individuals need to calculate their annual spending and multiply it by 25. 

6. Investing

After figuring out the FI, Victoria recommends investing the saved money to grow it. She recommends getting into investment as soon as possible because as the money spends more time in the market, the potential for growth increases. She further recommends investing in index funds as they come with several benefits. 

The viewers of Victoria’s video seemed to be highly engaged as they bombarded the comment section with various questions, which the creator answered. “But how can we only use the credit cards if they say it’s better you use 30% of your credit?” user @daniegabo_boutik asked.

For more financial tips and business guidance, you can follow Nicole Victoria (@nobudgetbabe) on TikTok.