Eric Tyson - Personal Finance in Your 20s & 30s For Dummies

You’re finished with school and entering the workforce. You want to make sure you create a firm foundation for your personal finances. Keep the following in mind when you start:

Get a checkup: Just as you benefit from a health checkup, be sure to get a checkup on your finances to ensure you’re making the most of your money and your financial decisions.

Determine what you need with transaction and savings accounts and evaluate which banks and other financial firms offer accounts that best meet your needs. Be on guard for high fees that erode your savings.

Celebrate the savings habit. The earlier in life you’re able to save money regularly, the smaller the portion of your income you’ll need to save to accomplish a given goal. Scrutinize your current spending so you know where your money is going and you can identify what to do about it.

Be on the lookout for spending reduction opportunities. Regularly saving money, especially on a modest income, is challenging. I present many ideas for reducing your spending, but ultimately, how you cut your spending is a matter of personal preference.

Understand good and bad debt. Debt can be a useful tool to enable the purchase of real estate or other valuable assets. Avoid consumer debt, such as on credit cards and auto loans. Consumer debt tends to be costly, and the interest isn’t tax-deductible.

Getting a paycheck and having a job requires more responsibility. Be sure to consider these important points when you’re encountering finances in your 20s and 30s:

Know and manage your credit score. Your credit score is a number that quantifies for lenders how likely you are to repay debts. Periodically access your credit reports, which you can do for free, and understand the steps you can take, as needed, to boost your credit score. Also take steps to protect your identity.

Consider all options before deciding to rent or buy. Renting and sharing living space can be both economical and fun if you avoid the pitfalls. Buying and owning may make sense if you see yourself staying put for an extended period of time.

Communicate with your partner about money. Money is often a source of friction in relationships. Thinking about money and planning how to manage it upfront with loved ones is usually time well spent.

Insurance plays a significant role in protecting your interests, including your health, your income, your property, and so on. Make sure you insure the following:

Your health: Though you may feel that you’re not likely to need it, having health insurance is wise. With a properly designed plan, you can contain the cost and get needed coverage.

Your income: Even if you have no dependents, you surely depend on your income, so you should have long-term disability insurance. And if you have dependents, you may need life insurance, too.

Your possessions: Insurance on your car, home, and other valuable possessions protects those assets from loss and damage and protects you from lawsuits. Beware, though, of small-stuff policies that aren’t worth buying.

“Eric Tyson is doing something important — namely, helping people at all income levels to take control of their financial futures. This book is a natural outgrowth of Tyson’s vision that he has nurtured for years. Like Henry Ford, he wants to make something that was previously accessible only to the wealthy accessible to middle-income Americans.”

— James C. Collins, coauthor of the national bestseller Built to Last; former lecturer in business, Stanford Graduate School of Business

“ Personal Finance For Dummies is the perfect book for people who feel guilty about inadequately managing their money but are intimidated by all of the publications out there. It’s a painless way to learn how to take control.”

— National Public Radio’s Sound Money

“Eric Tyson … seems the perfect writer for a For Dummies book. He doesn’t tell you what to do or consider doing without explaining the whys and hows — and the booby traps to avoid — in plain English… . It will lead you through the thickets of your own finances as painlessly as I can imagine.”

— Chicago Tribune

“This book provides easy-to-understand personal financial information and advice for those without great wealth or knowledge in this area. Practitioners like Eric Tyson, who care about the well-being of middle-income people, are rare in today’s society.”

— Joel Hyatt, founder of Hyatt Legal Services, one of the nation’s largest general-practice personal legal service firms

A Wall Street Journal bestseller, this book walks you through how to build wealth in stocks, real estate, and small business as well as other investments. Also check out Investing in Your 20s and 30s For Dummies.

This best-selling guide is now updated to include current fund and portfolio recommendations. Using the practical tips and techniques, you’ll design a mutual fund investment plan suited to your income, lifestyle, and risk preferences.

America’s #1 real-estate book includes coverage of online resources in addition to sound financial advice from Eric Tyson and frontline real-estate insights from industry veteran Ray Brown. Also available from America’s best-selling real-estate team of Tyson and Brown: House Selling For Dummies and Mortgages For Dummies with Robert Griswold .

Real estate is a proven wealth-building investment, but many people don’t know how to go about making and managing rental property investments. Real-estate and property management expert Robert Griswold and Eric Tyson cover the gamut of property investment options, strategies, and techniques.

Take control of your future, and make the leap from employee to entrepreneur with this enterprising guide. From drafting a business plan to managing costs, you’ll profit from expert advice and real-world examples that cover every aspect of building your own business. Also check out Tyson’s Small Business Taxes For Dummies .

Personal Finance in Your 20s & 30s For Dummies®, 3rd Edition

Published by: John Wiley & Sons, Inc.,111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright © 2021 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions .