Whenever friends or acquaintances find out that I blog about personal finance they’re usually curious to learn more. Money is one of those weird topics to discuss around friends.

How do you save money?

How do you get rich?

These sorts of questions usually come up. It’s like when you meet someone that works out. You want to know how to get huge. When you’re confused about money, it’s difficult to know where to start or what to do first. So you just ask general questions. Today I’m going to help you figure out this whole money thing.

What’s the formula for saving money in your 20s?

Increase your skills.

To make any money in this world, you need marketable skills. You have to do something that others are willing to pay for.

How do you increase your skill set?

Education.
Experience.
Online courses.
Books.
Private coaching.

Once you increase your skills, you can increase your income.

Pay yourself first.

Once you start making money, you need to figure out how you’re going to keep as much of it as possible. If you don’t keep any money, then you won’t have anything to show for your hard work. What’s the point of working so hard?

Paying yourself first is actually pretty easy. You go to your employer or your bank and you ask them to take off a set amount from your paycheck every single month.This money comes off your check automatically. You don’t have to do anything. You just fill out the initial forms.

How sweet is that? The money goes away and you never see it. Your goal is to figure out how to live on the rest. This is where the fun begins! You keep on saving this money without even thinking about it. When you’re ready for a big purchase, you simply have the funds available to do so.

Avoid debt like the plague.

We all know that debt is bad. Just like we all know that smoking is horrible for your health and that junk food makes you fat. Yet so many of us are in debt. Why? Because we all happen to be emotional beings.

I don’t want to preach to you. I’ll just leave it at this: do your best to avoid debt. You don’t want to be in your 30s paying off credit card debt that you racked up in your younger days.

Reward yourself.

The trick to remaining consistent with personal finance is rewarding yourself. No fun will lead to you being miserable. I don’t want you to be miserable while saving money. That will make you hate the world of personal finance.

You have to plan excursions, sneak fun into your life, and get out there. I personally try to plan every few months just to reward myself for consistent hard work. How you have fun is totally up to you. As long as you don’t borrow money for a trip, you should be good to go.

That’s the formula for saving lots of money in your 20s.

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