Updated: Mar 14, 2024

How I Avoided Debt and Got Through My 20s

It may not always be easy, but there are strategies on how to avoid debt in your 20s. MyBankTracker's Marina Shifrin explains her 6 favorite ways to save.
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If you were to steal my purse in 2010, you would've found a couple of dollars and about 20 to 30 Splenda packets.

Whenever I was in restaurants or coffee shops, I'd grab a couple and slip them into my purse.

Am I proud of this money saving technique?

Definitely not.

Did it help me to realize how to avoid debt and get through my 20s? Definitely, yes.

Your 20s are for struggling, making mistakes, and learning what direction you want your life to go.

The biggest mistake you can make during this time is to get into debt.

Until you've settled into your career, you should be doing everything you can to stay out of debt.

I wish I could tell you I had sophisticated money making/saving techniques like playing the market, flipping homes or running an Etsy shop, but I kept it pretty simple.

The golden rule I have always followed is never spend more than you make. That's it.

If you follow this one rule, you will never be in debt. Yes, there may be unexpected costs -- for example, the car I got a few months ago was totaled in a car accident.

I am not making enough for a new car so I've been using public transit. It sucks, but at least I am not going to go into debt over this accident.

Here are a few other techniques I've used to keep out of debt while in my 20s:

1. Rent Month-to-Month Until You Have a Stable Paycheck

When I first moved to New York, I was an unpaid intern at an ad agency.

Although I was tempted to settle into an apartment right away, I didn't know what kind of budget I would be working with, so I refrained from signing a lease. 

Instead, I found a month-to-month apartment in a decent part of town. Although my neighborhood felt relatively safe, my apartment was filled with cockroaches and weird smells.

I didn't have a kitchen or bathroom, I shared all of these amenities with other people on my floor -- but this apartment ended up saving me from moving into a place I couldn't afford.

The second I got hired on full time, I started the apartment search. Luckily, the month-to-month agreement gave me the freedom to really take my time for finding an affordable place.

I used the Yearly Salary ÷ 40 = Monthly Rent equation to figure out how much I could afford. After getting this figure, I subtracted another $100 dollars and that's the monthly rent I looked for.

I know it sounds crazy, but you'll soon see I had a good reason for looking for a place way below my price range.

My struggle at the beginning ended up keeping me out of debt and helped me start a savings cushion.

2. Put Away $100 a Month Into Savings

Depending on your job/situation, $100 may seem like a lot of money to put away each month.

It is for me.

But you'd be surprised at how easy it is to make $100 in one month.

Think about it: all you need to do is find a way to make $25 each week.

Or you can do what I did, and purposely find an apartment below your price range and put the extra into savings.

Here are some things I did to hit my $25 a week goal:

  • Offered friends and coworkers to dogsit
  • Babysat once a week for $15/hr
  • Sold clothes to Beacon's Closet (they never bought them, but maybe you're more fashionable than I am).
  • Offered copywriting services to small business owners who do not not speak English fluently
  • Picked up one-off freelance opportunities; writing newsletters, blogposts and ad copy

If you could put even more away, that's great!

But you should never go below this minimum.

If you are going to below $100 in savings a month, you need to reevaluate your spending habits.


3. Create an Entertainment Budget

I consider travel, shopping and going out to eat, all luxuries.

My paycheck from my full-time job went towards rent, groceries and savings.

If I wanted to meet a friend for drinks, go to the movies or buy new clothes; I had to dip into my entertainment budget.

In order to create a budget for these types of luxuries, I got a waitressing job on the weekends.

In just four months I earned enough money to pay off travel and shopping expenses for the year.

I never spent more money than I had, which meant there were a few times I had to miss out on weekend trips.

But, waitressing for those four months was totally worth avoiding the financial burden going out with friends and traveling can put on a person.

Oh, I should also mention that my waitressing job was what caught the attention of a future employer at a large media company.

He later told me he hired me because he knows people in the restaurant industry work twice as hard as those in the media industry.

4. Don't Buy Drinks

This tip seems kind of trivial but it's amazing how much you'd save if you cut out spending money on smoothies, alcohol and/or coffee.

I average about 5-10 cups of coffee a week and 5-10 drinks a week (I'm Russian, OK?).

So let's do some quick math.

A cup of coffee costs about $1.38 on average, a glass of wine is around $5.

Which means I could be spending anywhere from $382 to $3,165 on drinks a year.

This is not including getting smoothies, or covering friends drinks when I go out.

If you are just starting out in your career and you're trying to save money, stick to water when you're out and make your coffee and cocktails at home. When you become rich and successful you can buy all the martinis you want.

5. The Internet is Your Best Friend

A few months ago I made the two-hour trek to San Diego to see some college friends who were in town for the weekend.

The trip alone cost me around $110 in gas, it wasn't until after I returned that I found out about the ride-share program on Craigslist.

Yes, Craigslist can be incredibly creepy at times, but it can also connect you to other financially savvy people.

In fact, my best friend and current roommate was a Craigslist find.

As long as you trust your gut and proceed with caution, you could save a lot of gas money by using ride shares.

6. Always Negotiate

I personally hate negotiating, but you'd be surprised how much this could save you.

When I was living in Asia, I was able to knock off $50 from my weekly rent check just by negotiating with my landlord.

I recently tried the same method with my apartment in Los Angeles and was able to get $20 off the monthly rent.

It's not much, but it adds up in the future.

I've also always negotiated my freelance salaries.

Most employers expect there to be a negotiation, you should never settle on the first figure.

It can be daunting, especially for women who aren't used to being aggressive in the work place, but it's completely necessary.

I was recently talking to a friend who said she asks for a raise every three months and has never been turned away.

I've never heard of anyone losing a job solely due to negotiation. It's worth a shot!

When you have very little money and responsibilities you are free to make mistakes and learn from them -- that's what being in your 20s should be about.

Accumulating debt at a young age could be disastrous for your personal and professional future, so make sure you do everything you can to boost your savings account and develop good spending habits.

All you really need to know is:  make more than you spend.