9 Indispensable Financial Tips for Teens & Twentysomethings

I hate to admit this, kids, but I used to think my parents were really dumb too. A few peas short of a casserole. All foam, no beer. Dumber than a box of hair.

I get it; Matthew, you’re 16 and, Nina, you’re 14 going on 29, which, by default, means you both already know everything about anything. But as time passes by, you’ll begin to realize that the older you get, the smarter I get.

Funny, yes, but it’s true; I swear.

Keep that in mind because, as a responsible parent, I feel it is my sacred duty to at least try and pass along to you a little fatherly financial foresight.

Yes, again.

This time, your dear old Dad is going to share a few pearls of wisdom that will help you save a lot of money when you’re finally ready to start setting out on your own.

Now get your pencils ready, kids, because here we go:

Learn how to cook. Cooking is a basic life skill that everyone should learn. That’s because when you’re just starting out on a tight budget, cooking at home is the perfect recipe for saving money. And, Matthew, keep this in mind: It’s a proven fact that 99.42756% of all females love men who can whip up dinner without the aid of a microwave oven.

Start saving for retirement now. As a teenager, I earned roughly $25,000 working in a grocery store over several years; that’s equivalent to almost $60,000 today. Unfortunately, because I figured old age was an eternity away, I didn’t put a single cent of that money toward my retirement nest egg. If I had invested just $2500 in 1983, that relatively tiny contribution would be worth more than $27,000 today, assuming an annual return of 8%.

Buy a first car that’s dependable, not flashy. When I was 16 your Uncle Kevin was kind enough to give me an old sedan he no longer needed. But even though it was free, it still cost me a bundle in insurance, and operation & maintenance costs. If you truly want to minimize the financial impacts of owning a vehicle, make sure your first car is fuel-efficient, dependable, and at least a few years old. Save the flashy stuff for later.

Learn how to use a spreadsheet. A computer spreadsheet is arguably one of the greatest tools ever invented. Ever since we’ve been married, your mom and I have been using one to efficiently track our spending habits down to the last penny. If you kids intend to keep a budget — and you should — remember this: A spreadsheet will not only help you effectively manage your finances, it will also greatly simplify your life and save you lots of time in the process.

Live at home for as long as possible. I know it’s not good for your social life, but living with Mom and Dad after graduating from high school will save you lots of money in rent, utilities, food and other living expenses that you can use to help cover college, or business start-up expenses — and even give you a head start on your retirement savings. You’re welcome.

Know what you want to do in lifebefore you go to college. College is so much more expensive today than when I went to school. If you expect me to help defray some of your expenses, figure out what you want to do before committing yourself to an expensive university. Otherwise, you risk earning a worthless college degree that’s guaranteed to result in a poor return on your investment. By the way, there’s no need to rush; you can always attend a community college until you get things figured out.

Don’t rush into marriage. Divorce can be an extremely expensive proposition, which is one reason why choosing who to marry is one of the biggest decisions you’ll make in life. So take your time; studies show that divorce rates are higher for people who marry at a younger age. And, Nina, don’t fall for the romantic notion that everyone has a one-and-only perfect soul mate; it’s not true. There really are plenty of fish in the sea.

Before you buy a house, rent. Home ownership comes with big risks and responsibilities, which is why it’s not for everyone. There are lots of financial and personal factors involved in choosing whether to ultimately buy or rent. If you aren’t living at home, rent for awhile so you can carefully consider what’s best for you before finally committing.

Hold off awhile before having kids. I’ll keep this short and sweet. Although they’re worth every penny, children are notoriously expensive, so spend a year or two enjoying life with your spouse before you decide to start a family. Besides, kids, I’m really in no hurry to be a grandpa. At least not yet.

Photo Credit: Marcin Wichary

(This is an updated version of an article originally posted on September 19, 2011.)


  1. 1

    Olivia says

    Hey Len,

    Usually I’d just pass your articles onto my kids as they are. Except for the line about living at home as long as possible. We’re trying to convince our 23 year old to think seriously about moving OUT of the house. Otherwise your thoughts are right on. Thanks for your post.

    I’d also add to your list a couple personal favorite skill sets. Know how to change the oil in your car, rewire a lamp, thread a needle, change a tire, do laundry, and handle basic hand tools. Especially if you follow the advice of marrying later.

    • 2

      Len Penzo says

      LOL! Sorry for that, Olivia. I realize the living at home tip may have been a bit too much for some parents, but the operative words there are “as long as possible.” In other words: kids need to take advantage of what their folks are willing to give them in that regard. I realize some parents will want their kids out soon after they graduate from high school. And even I will have my limits with my kids: 24 or 25 will probably be it. Then again, I won’t really know until the time comes — and I’m in no hurry. :-)

  2. 4

    Kara says

    I can tell you that at 25 I’M more eager to move out than my soon to be mother-in-law is about us moving out. Len, your advice is great, I only wish I had saved more of my income from High School and not spent over a $100K on an education that I am not using. My fiance and I are however living with his mother and still driving the cars we had in High School and getting married in a about 3 weeks, in which the rings cost three times what the actual wedding will.

    In another year or two though we should have the mother-in-law’s house fully renovated in order to sell it and buy her a condo for her retirement and then have the remainder for a down payment for our own home which will hopefully be kid free for a year or two! Thankfully, even though I spent WAY too much for my degree it did help me to get a job at the Hospital which has amazing benefits! 10% Employer contribution and %5 employee to my 401K, health insurance allowance with the rest rolled into an FSA, and I am more able to contribute to my Roth. I’ve also paid off almost all of my personal debt accumulated during college while paying for the renovations to the house. I knew that I had to do all this stuff and it was your blog that really got me motivated to never want to pay interest for anything again if I can help it. Thanks Len!

    • 5

      Len Penzo says

      Wow! You just made my day, Kara! I’m so glad I was able to get you motivated to stop paying interest. Your job does provide some some terrific benefits — count your blessings. It sounds like you and your fiance are going to be just fine.

      And congrats to both of you on your wedding! :-)

  3. 6

    pen says

    I went and re-read the links you posted. eating at home really does save money… and yes, one of the reasons my guy and I are together is because he is an excelent cook.

    • 7

      Len Penzo says

      It saves a lot of money — especially if you’re eating out several times a week or more. By the way, I’m forwarding your comment to my son, since I am sure he thinks I made up that claim about women loving men that cook.

  4. 8


    Len, great post, as usual…
    It will be fun to watch how the mid-late teenage angst affects your willingness to keep ’em at home longer.

    Empty nest rocks!

    My son is the spread-sheet King even in a work environment of mortgage/business nerds-and my daughter knows Excel better than dear ole dad…(not that hard…)
    I might have added balancing a checkbook, and always in be in the black. Check bouncing is real money these days.

    • 9

      Len Penzo says

      Mid-late teenage angst? I’m already having a ball with early teenage ‘tudes! LOL

      I’m pretty handy with an Excel spreadsheet too, although it seems like I’m always learning new tricks that incredible software can do.

      Great point about balancing a checkbook too, Dr. Dean. (Although I’m betting checks become obsolete by 2020.)

  5. 10


    All good points! I told my kids that before you consider marriage, you should date that person for all 4 seasons and longer would be even better. My kids took that advice to heart and are in their thirties and still unmarried.

    • 11

      Len Penzo says

      I think the 4-seasons rule is great for people in their 20s. But I also think as people enter their 30s, they become more attuned to who they are, and so they probably afford to get away with a bit of a shorter evaluation timeline — if only a little bit. But that’s just me.

  6. 14

    Max says

    Getting married at 20 will have saved me thousands of dollars on my college degree by the time it’s paid off simply because at 18, my parents helped me complete my FAFSA, apply for loans, and dropped me off. Their income (around 100k/yr at the time) was factored into my Financial Aid, yet they did not pay a dime (toward tuition, room/board, etc.) of the actual expense of college. My first semester of college (at a private school) cost over 12k. My second semester was at a cheap in-state school and cost 5k including room and board. Whether or not this is reasonable or fair is beyond the scope.

    The point is that because I could not declare myself independent, my Financial Aid package consisted of 8+%/yr (and rose to 12+% in a couple years) collegiate loans from a bank that accrued interest at an increasing rate while I was in school, and something like $1300/semester in Federal Unsubsidized loans (which also accrue interest while you are in school).

    I got married after 2 years of college and I nearly cried for joy when I saw my financial aid package for the next school year. I actually got grants and federally subsidized student loans (that don’t accrue interest while you’re in school).

    The take away: consider getting married just to save money before going to college if your parents aren’t going to help you with it. Also, married student housing is cheaper than dorms in many cases. Now I’m imagining a website set up to help “match” people going to the same school who are in the same situation I was.

    • 15

      Len Penzo says

      That’s a risky strategy in my opinion, Max. Especially if you make a bad spousal choice by marrying in haste and then the whole thing turns upside somewhere down the road. I think it would be smarter to find a university that doesn’t cost as much — but that’s just me. And if you can’t, two words: ironclad prenup.

  7. 16


    Wise word from years of experiences. I can’t disagree with any of them. Hold off having kids is much more important than hold off getting married, IMO. Once you have kid, it’s a different world. :)

  8. 18


    Some great tips here. The cooking one is a new perspective for me, and I wish I had learned to cooked early on. Not only is it a “chick” magnet, it is actually a better way to eat healthy and save some money.

  9. 19



    Great advice! Although anyone that’s a parent probably cringed like I did when I saw the part about living at home. I’d say that the spreadsheet advice would be my number 1, by far. I teach IT, and can’t get across enough how important it is to learn electronic budgeting. How many assignments I give in OOCalc: tons! Love the post, and if you see a lot of hits from Belize, that’s because I’ve posted it on our online learning site.


    • 20

      Len Penzo says

      Thanks, Dr. Awesome! I realize the living at home part would make a lot of moms and dads wince. Of course, that advice only applies when the parents are willing. I’m not sure how long my patience will last when the time comes, but I am willing to give it a shot — especially since my parents extended the same courtesy to me.

  10. 21


    Hi Len! This was a great article jam packed with awesome tips! Your advice was meant for teens and 20-somethings, but really everyone can benefit from this information. Simple things make the biggest impact sometimes. Items like learning to cook and use spreadsheets offer up a great, do-able way to save money and manage finances — thanks for sharing! ~Social Media Manager for Pawngo, the pawn shop reimagined

  11. 23


    Whoa, I’d love to hear my parents say: “I’m really in no hurry to be a grandpa.”

    At least once every few months, I’m actively defending the fact that I’m not reproducing yet, against a chorus of “But we’ll be dead soon!” // “We’ll be too old to spend much time with our grandkids!” // “We’ll help take care of the baby — er, to an extent.”

  12. 24

    jim says

    Great advice – passing it on to my 20-something who has recently (and temporarily boomeranged home to save $ for grad school) – personally I love having him back home and am cherishing the last few months he’ll ever live with us. I don’t feel put out or put upon. It’s really fun actually – especially knowing that this is setting him up financially to be in a really good position. I just don’t understand (given today’s market/economy) how/why parents would begrudge that to their recent college grads or otherwise 20-somethings.


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