If You Balance Saving and Living in Your 20s You’re Doing it Right

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You can balance saving and living in your 20s if done the right way. Here's how to balance enjoying life, in your 20s, while still living for the future.

Many of you have likely seen the article that infuriated many people titled If You Have Savings in Your 20s, You’re Doing it Wrong, which has garnered a lot of attention and led to articles like If You’re Not Getting Rich in your 20s, You’re Doing it Wrong, and Don’t Be a 20-Something Idiot.

While both of these articles are great in their own right, I wanted to come at this from a different perspective.

For anyone who hasn’t read the piece, it argues young adults should give into the “YOLO” mentality so prevalent among us. We shouldn’t be consumed with saving and forget to live our lives.

As someone who has been slowly recovering from focusing on the numbers in my budget entirely too much, to the point where I was missing the big picture and forgetting to enjoy life, I get it. However, never has it crossed my mind to blow all the money I’ve worked so hard to save. Instead, I spend intentionally, which allows me to save while having fun.

It can be difficult to balance saving and living in your 20s, but it can be done. Let’s go through each point the author made, and I’ll give you my advice on how to take a less extreme approach to enjoying your 20s while still saving.

Everyone Needs a Safety Net


First point: Their need for us to have a safety net is just a giant metaphor for the difference between our parent’s generation and ours…We’re taking our time growing up, refusing to be shackled by mortgages and diapers. We’re not trying to live with safety nets; we’re trying to live on the edge.

Even if we’re becoming “adults” later on in life, this makes no sense. Anyone that has any liabilities needs a safety net. It’s always a wise idea to have some money saved up in the event something goes wrong.

What if you lose your job? Do you have a backup plan if you can’t afford rent, besides moving back home? Having savings allows you to continue living on your own while you find another job. This makes your situation less stressful and you can take your time to find a good fit rather than accepting the first offer that comes your way.

What if you want to quit your job because it’s not fulfilling and you want to switch to another career? With nothing saved it would be foolish. Instead, you continue slaving on in a cubicle.

What if you’re in a bad accident, and your health insurance doesn’t cover everything? The bills start to pile up. You have no savings, and you can’t afford to pay. Talk about stressful!

Having money saved gives you options, which leads to having more freedom. That’s my definition of living on the edge. If I had no savings, I’d be teetering on the edge of insanity because I wouldn’t be able to sleep at night.

All that being said, the amount you need to save depends on your situation. Most people in their 20s (if they don’t have a house or kids) can probably get away with something in the $1,000 to $3,000 range.

Saving for Retirement is Important


Second point: When you live your life around your retirement fund, you may as well retire now. You can’t make a mark on the world if you’re too cheap to live in it.

Most people don’t advocate for living around your retirement fund, though it is important to save for retirement because nothing is guaranteed for us. Our parents have Social Security, but will we? I’m not willing to risk having freedom later on in life. If that means making a few sacrifices now, so be it.

Saving something is better than saving nothing and investing in your 20s isn’t boring or cautious – it’s smart. If you can’t afford to max out your IRA or 401(k), there’s still sense in saving a little each month. That’s the approach I’ve been taking. It will all add up eventually!

Beyond that, I think most of you know how powerful compound interest is, and the earlier you start saving, the stronger it becomes.

Saving Equals Settling for Less?


Third point: People who are saving in their 20s are people who don’t set their sights high. They’ve already dropped out of the game and settled for the minor leagues…$200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.

What?! Those saving a lot in their 20s could very well be setting their sights on early retirement, which doesn’t sound like the minor leagues to me. They could also be saving up for a mini-retirement because they want to travel the world for a bit.

I sound like a broken record, but saving money gives you options as long as you’re saving for a purpose and using your money for that purpose. I’ve been guilty of saving out of fear, and no, it’s not rewarding.

To the last bit – yes, networking is important, but it doesn’t have to be expensive. I understand the author lives in NYC, but there are other ways to network with influential people than going out and drinking at fancy bars.

Even then, what happened to making your own way? If living life on the edge means answering to someone else about your vacation time then your raise doesn’t sound too appealing to me. I know being self-employed isn’t for everyone, but there are a number of ways to earn more money that don’t involve spending a ton.

Deprivation is Missing the Point


Last few points: Life is to be lived, not watched from the inside of your rent-controlled apartment…When you die, you can’t take your money with you…It’s good to be cautious and plan for unexpected events. It’s also good, however, to learn how to release and destress. Everything works out, and if you’re smart, able and had a job once, you’ll have one again.

I completely agree with the first two points. Deprivation isn’t fun, period. But saving does not equal deprivation. Neither does being frugal. Frugal Rules’ tagline is Freedom Through Frugality; That’s because living within your means brings you happiness and is intrinsically freeing. Debt is the exact opposite.

The problem most people have is that they’re unaware of their spending habits. This creates chaos that becomes too overwhelming to deal with, so they resign themselves to living paycheck to paycheck in the name of having more fun.

You don’t have to completely limit yourself to save! If you can master the basics of money management and spend less than you earn, you can still live an amazing life. You need to live and spend according to your values, and stop worrying about everything else (like keeping up with the Joneses). That is freeing.

Lastly, I appreciate the author’s optimistic attitude toward replacing income, but this isn’t the case for everyone. You can be an amazing employee and (sadly) have horrible interview skills. Or your industry could be saturated. Jobs aren’t guaranteed. It’s easy to be positive when you’re employed, but I’ve seen too many people struggle to land a job to agree with this.

Saving and Having Fun Aren’t Mutually Exclusive


Hopefully you realize you can save for the future, for things that matter now, and still have fun. It’s all about prioritizing what’s important to you and saying “No” to the rest. You have to create a life that’s worth living to you.

For many, going out drinking to “network” every night doesn’t sound fulfilling. To others, it sounds like a blast. “Living on the edge” has a different meaning depending on who you ask. Define it for yourself and go after it. You shouldn’t be living a life that doesn’t excite you. Just use your money wisely as a tool to get there.


What was your reaction to the article? Do you agree with the author? Do you think people can balance saving for the future and living in the present? Does saving equal deprivation, or freedom? 

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Erin M. is a personal finance freelance writer passionate about helping others take control over their financial situation. She shares her thoughts on money on her blog Journey to Saving.


  • Gretchen says:

    This post came at exactly the right time for me, so thank you, thank you! We’ve been moving our focus from paying off debt to saving, saving, saving. I’ll turn 25 in a month or so, and reading this makes me feel like I’ve (somewhat) got it together. Narcissism aside, I couldn’t agree more that deprivation isn’t a way to live life 😉

    • Erin says:

      I’m glad to hear that, Gretchen! I definitely think you guys have it together. Honestly, anyone even thinking about retirement (early or not) before 25 is in a good mindset. I have so many friends who don’t think it’s a possibility, and who are content living with just a little savings in their bank account. They’re not forward-thinking at all.

  • Money Beagle says:

    Balance is truly key during this period of your life. It’s not a time to sit inside like a hermit saving every penny, but going out and blowing every dollar as soon as you have it is a bad way to go as well. Somewhere in the middle gives you benefits of saving and fun at the same time.

    • Erin says:

      Yes, exactly! I’ve seen a lot of people blow their paychecks within a day or so of receiving it and then complain they’re broke. It’s just about knowing how to manage your money in line with how you want to live your life. There’s no reason to stress about not having enough money to pay for necessities because you’ve spent it on clothes and going out.

  • Kate @ Cashville Skyline says:

    I really appreciate your balanced approached to both the original article and all of its responses. And there are valid points in all of them. But in the end, you have decide what’s best for you. And, hopefully, that means finding the balance you’ve suggested.

    • Erin says:

      Thanks, Kate! I related a bit to the article because I know I’ve been overly focused on saving, but I’ve been able to scale back while dedicating more funds to “enjoying life” without going overboard. It’s completely possible, you just need to be mindful about how you spend.

  • Hannah says:

    I don’t think the original author gives good advice, but she makes one point that I don’t think is made often enough in the personal finance fear. When it comes to income, knowledge workers shouldn’t operate out of a state of fear.

    In our twenties, even if we screw up hardcore, we have three or four decades to fix the problem. Your twenties are a great time for taking risks, networking, and advancing in your career even if that means falling on your face a few times, and even if you’ve got a spouse or kids along for the ride.

    Of course as a money nerd, I always recommend having some safety net in place too.

    • Erin says:

      Oh yeah – your 20s is definitely the “best” time to make mistakes as you can make up for it down the road. The more mistakes you make, the more lessons you learn, and it’s better to learn them earlier. I know I was really afraid of making the leap to self-employment, but I’m so glad I did! Increasing your earning power early on is a must.

  • EL @ Moneywatch101 says:

    Erin these are all great points to debate the original article. People assume to live life you have to do it while taking on so much risk. IT doesn’t make sense to me. I like the point you make about some people who are not the best at interviewing. Its a great debating point on the career aspect to drive it home.

    • Erin says:

      Thanks, EL! I’ve never been one for taking on too much risk, so I favor balance. Jobs are never guaranteed. Networking is certainly valuable if interviews aren’t your strong suit, but to say “everything works out” is taking it a bit lightly.

  • Travis says:

    “Deprivation is missing the point.” Hallelujah. I can’t tell you how many times while we were in our debt management program paying of $109K of debt that I was scorned in blog post comments for daring to spend any money on myself, have a birthday party for my kids, or *gasp* buy a Christmas present. Life is about balance…..and having fun within the confines of the resources you have available.

    • Erin says:

      Especially when you have more debt and it’s going to take you longer to pay it off. You can’t shut down your life for that long! It’s just not sustainable. And you managed to be super successful anyway. 😉

  • Our Next Life says:

    While I understood some of the author’s points in the piece you’re reacting to, nowhere did she acknowledge lifestyle inflation. Even if you get the mythical “$60K raise” that she mentions, if you’re used to going out and living it up every night, you’ll need every penny of that just to support your inflated lifestyle, even if all that drinking is supposedly “networking.” We’re in our late 30s, and don’t know anyone who ever regrets getting their financial act together when they did — most people regret not doing it sooner. But you know how it goes — everyone always thinks they know how they’ll feel years from now, when they’re older, but it usually doesn’t play out how you expect. 🙂

    • Erin M says:

      Exactly – just about everyone I know wishes they had gotten their finances in order earlier! I had linked to a post I wrote on lifestyle inflation a few weeks ago. You’re right, she’s encouraging it (or disregarding costs in the first place). It’s a dangerous mentality to have that could easily lead to debt.

  • Jaymee says:

    I think posts like the Elite Daily gives us young people a very narrow-minded look at personal finance. I honestly felt that the author is advocating for “fun” alone and doesn’t understand personal finance herself. I’m glad posts like yours are calling her out on it.

    • Erin M says:

      Hi Jaymee, thanks! I agree. It’s simply promoting the “YOLO” lifestyle millennials have grown to be known for, without mentioning any of the financial implications that can come with it. Not a good idea.

  • Michael @ NTPNW says:

    Good article. When I was getting out of debt I was doing the opposite. Paying off debt at all costs and forgetting to live life. Once I had some breathing room I again began to enjoy life’s small pleasures. It really is a balance that’s needed to win financially.

    • Erin M says:

      Thanks, Michael. I know the feeling. Debt is like a dark cloud following you everywhere, and there can be a lot of pressure to pay it off ASAP. I’ve been trying to stay balanced as I have a tendency to focus on the numbers rather than enjoying life!

  • Jayson @ Monster Piggy Bank says:

    I am in late 20s and I just started living it right like a year. Realization was a bit late. That said, I am still glad that I did because I know that I am on my way to financial independence and to achieving my ideal retirement goals, Erin.

    • Erin says:

      Yes, it’s always better late than never! There are many people who didn’t get their finances in order until their 40s or 50s. It’s never too late to start over.

  • Alex Dennery says:

    Great article! Very relevant to me being a recent grad working full time. I’m pretty sure I’m doing all the right things (Maxing out 401k contribution, investing a lot each month, cutting spending when I can, and not buying expensive unneccessary things) but I guess the main part where I struggle is strategizing. For example, goals I have such as living overseas, moving away out on my own (in about 5 years), etc.. makes me wonder what the best time to make the move and how much to risk and if the money I spend is worth the long term effect (ex. 100 with time value of money is much more many years down the road). I want to enjoy my 20’s to the fullest but also not stay safe and take risks (that are educated of course) but I just gotta figure out how to do that I guess.

    • John Schmoll says:

      Sounds like you’re doing a lot of the right things Alex – maxing out your 401(k) is pretty killer, at any age. I think many are that way, I know I can get stuck by knowing when to take a step. You already seem to have the behavior down and that’s half the battle.

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