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Money Lessons Everyone Should Learn by the Time They are 25

Here are some money lessons you should have learned before turning 25

By the time you turn 25, you probably think you have learned everything there is about money. But it is time that you leave your teenage and newly adult life behind and start thinking about the future, seriously. There is no doubt you must have already learned a lot of valuable financial lessons by now, but here are a few money lessons everyone should know by the time they are 25.


You must have already learned that you should be saving as much as possible. An excellent way to save is by following the 50/30/20 rule. As a rule says, you should spend 50% of your income on necessary expenses like utility bills, rent, and insurance. 30% of your income should be going towards your daily expenses like groceries, fuel, entertainment, and outings. The remaining 20% of your earnings should go towards your savings. 20% might seem like a lot or too little depending on how much you make, but 20% keeps adding up and turns into a lot in a few months!

Compounding Interest is Your Friend

Put your savings into an account with compound interest. With compound interest, you make money off the amount you are saving, and on top of that, you earn money on the interest also! It is the easiest and most reliable way to make money from your savings.

But remember to stay away from compounding debt! Compounding can work for you or against you, which is why it is important you pay off your debts and cards at the correct times. The earlier you start saving, the earlier your compounding interest starts adding up, which is why you should start saving as early as you are 25!

Start Preparing for Your Financial Goals

What are your financial goals? Have you thought about what and where you want to be when you grow older? Start planning and writing down your financial goals and work towards achieving those goals. Writing down your goals will make you more responsible for your goals and help you put your mind towards them.

Maybe your goal is to buy a house? Getting into the property and real estate is a serious investment, and you need to have a good plan to go with it. There are down payments, mortgages, interests, and so many unseen expenses when buying a house that you need a serious and concrete plan to achieve that goal.

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Splurge if You Want to

If you are already saving, it doesn’t hurt too much to spend on a few life experiences and entertainment. It isn’t bad if you spend some money on traveling, hobbies, or maybe a new PC. Everyone needs some fun in their lives! Find a good balance of saving whenever possible and splurging on yourself to enjoy your life. If you don’t spend on good life experiences while enjoying them, you will have regrets when you are older!

Start Saving for Retirement

Retirement may sound like a far and away time when you are just 25, but in reality, it isn’t. By the time you are 25, you have an average of about 40 years before you retire, which is a lot of time left to work with. You should start saving from now because you never know what the future holds. No one expected the Covid-19 global pandemic, did they?

Saving for retirement from now will allow you space to work with. Unexpected expenses won’t completely break down your financial goals if you have been saving since early adulthood. Remember compounding interest? Get as much money into that account starting now so that you build as much interest as possible by the time you are ready to retire!

Written By

Riley is a finance, lifestyle, and entertainment writer living in San Diego. He received his bachelor's degree in Journalism and Multimedia from the University of Oregon. His work has been featured in many finance and lifestyle publications throughout the US. When he is not writing, Riley enjoys reading and hanging out at the beach with his dog.


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