15 Financial Hacks You’ll Wish You Knew at 20

Article Highlights

• Your 20s are crucial for building wealth with strategic moves.
• Calculate expenses in terms of time instead of money.
• Be smart about housing and taxes to optimize financial growth.
• Credit cards should be tools for rewards, not emergencies.
• Always negotiate and track your net worth for long-term success.

your 20s are the most powerful decade for building wealth but only if you know how to play the game.

now this isn't about making huge paychecks or winning the lottery; it's about simple strategic moves that stack up over time.

too many people get stuck chasing the wrong goals, spending on things that don't matter, or ignoring opportunities hiding in plain sight.

the good news is a few smart financial habits can change everything. so let's jump in!

starting off with number one: calculate your expenses in hours, not dollars.

the average person works over 990,000 hours in their lifetime.

how you spend that time directly translates to the quality of your financial life.

when you think of money as time, everything changes.

let's say you earn $20 an hour and you're eyeing up a $200 gadget—that's 10 hours of your life spent working for something you might not even value in a month from now.

this hack reframes impulsive spending by tying it to the effort behind your paycheck.

so you prioritize buying things that truly matter to you, like experiences or investments that grow over time.

ask yourself: how many hours of work is this worth? if a pair of sneakers costs 10 hours of work, well you might think twice before splurging.

number two: rent your assets.

assets are meant to add to your life; the moment they take away from your life, they become liabilities.

you can turn any liability into an asset 10 times over when you charge someone else to use it.

anything you have that's valuable—a car, camera, heck, even a special carpet cleaner—you can rent that out, so it earns money when you’re not using it.

you could rent out your car on a platform like Turo or your DSLR camera on a site like Fat Llama.

there are people who funded their home deposits, their trips around Europe, even their first business ventures just by renting out their clothes, cars, and cameras.

when you get into the habit of turning things you don't use into passive income streams, you'll start to see opportunities and dollar signs everywhere.

number three: don't buy a house too soon.

now you've probably heard people say that renting is like throwing money away, that you're putting all your money into someone else's pocket.

that's a classic misconception because the reality is that buying a house too soon can lock you into debt, drain your savings just as you're getting started, and limit your flexibility at a time when freedom and choices should be at your fingertips.

renting while saving and investing intentionally allows you to grow your money in ways that outpace home equity.

not buying a home could actually be a smarter financial move, especially when you're young.

it allows you to save for opportunities like starting a business, traveling, or investing in a growing business.

homeownership is great when you're ready for it, but rushing into it can mean years of unexpected maintenance costs and a huge mortgage weighing you down.

renting gives you time, freedom, and the choice to build wealth strategically—assets far more valuable than the illusion of stability that comes with owning a home too soon.

number four: don't just pay taxes; manage them.

learning how to optimize your taxes in your 20s might sound dull, but once you know it, you’ll basically unlock a cheat code for your finances.

taxes aren't just an inevitable part of life; they're also one of the most controllable expenses you'll ever face.

contributing to a retirement fund isn't just saving for retirement; it's a way to instantly reduce the amount of income that gets taxed.

you're paying yourself first and keeping Uncle Sam from taking a bigger bite than he needs to.

if you're self-employed, it's even more powerful.

find out where you can get your tax credits from—like that new skill you've been dying to learn could actually save you money come tax season because you earn tax credits for it.

or if you've gone green, installing energy-efficient appliances or driving an electric car, well, there’s a credit for that too.

even losses can work for you.

if you invested in a few stocks that didn't go your way, you can use tax loss harvesting to offset gains somewhere else, which lowers your tax bill while keeping you on track to grow your wealth.

taxes aren't just something you pay; they're something you manage. the earlier you learn this, the more financial freedom you’ll create.

number five: start simple, then diversify.

you start off with index funds because it's simple, low-risk and proven to work.

then you diversify.

put your money into alternative assets that match your long-term vision.

when you've got your foundation in index funds, you can start mixing up your portfolio and invest in alternative assets that actually outperform traditional markets.

historically, art has delivered impressive returns while acting as a sort of a safe haven investment, especially in uncertain economic times.

today's sponsor Masterworks is making it possible for anyone to invest in art; their experts purchase iconic works from artists like Banksy, Basquiat, and Warhol, break them down into shares and allow investors to buy in, just like buying a stock in a company.

when the artwork sells, the profits are distributed back to shareholders.

the results are remarkable: Masterworks has exited 23 paintings with over $60 million in total investor proceeds.

even during recent market downturns, they posted profitable returns like an $8 million Basquiat sale.

a recent study showed that 83% of multi-millionaires aged 43 years and younger collect art or plan to because they understand the long-term value in a diversified portfolio.

so if you're looking to expand beyond your index funds, now's the time.

Masterworks traditionally has a long wait list, but as an Alux subscriber, you're getting exclusive priority access.

go to masterworks.art/alux or scan the QR code on screen to skip the wait list and invest in Blue Chip art today.

building wealth starts with a simple strategy, but expanding into assets like art is where the real opportunity lies.

number six: credit cards should be used for rewards, not emergencies.

credit card companies hand out almost $68 billion a year in rewards, and about 23% of that goes completely unclaimed.

you're throwing away money!

okay, and you're using your credit card for the wrong reasons.

your credit card shouldn't be for emergencies; that's what the emergency fund is for.

it also shouldn't be a last resort to fund your daily expenses; that's what your income is for.

what you should be using it for is to book your holidays, flights, hotels, car rentals, and then pay the balance in full every month.

because then you accumulate points, and the more points you get, the more you can travel for free.

credit cards have become a death trap when they should be a gold mine.

wealthy people only pay for half of their trips; the other half is funded by claiming their rewards.

when it comes to debt, credit cards aren't the problem; mismanagement is.

because when you use it strategically, you can get free flights, cash back, hotel stays, even first choice for concert tickets.

a credit card isn't a lifeline for emergencies; it's a tool for building wealth through smart spending.

number seven: choose employers who will match your retirement contribution.

the days when working for a company meant they would automatically contribute fully to your retirement savings might be gone, but there are still benefits that you should be taking advantage of.

most companies will offer to match a portion of your retirement savings.

like if you put 5% of your salary into retirement savings, your employer might match that and add another 5%.

sounds like free money, right? definitely something you would think people would take advantage of!

but shockingly, most people don't.

now employers don't always make this offer clear, so perhaps these people don't know about it or they think they're not able to save enough.

but any small amount makes a difference, especially when your company is going to match it.

if you earn $50,000 a year and your employer offers a 100% match up to 5% of your salary, that's $2500 extra every year just for contributing to your retirement account.

over 30 years, this can grow to hundreds of thousands of dollars thanks to compound interest.

so if your employer offers to match your retirement fund, make sure you contribute enough to maximize that.

it’s one of the easiest ways to secure your future, so do not leave that money on the table.

number eight: think in decades, not days.

when you think in days, you get trapped into decisions that feel good now but cost you later.

always focusing on the immediate future is actually more stressful, and then to combat that stress, you're more likely to spend without thinking.

upgrading a phone instead of starting an emergency fund, skipping retirement contributions to fund a weekend trip, or avoiding investments because the payoff feels too far away.

these choices don't seem harmful in the moment but they add up.

let me tell you: days turn into weeks, weeks into years, and suddenly there's little to show for all of that time.

but when you think in decades, you stop seeing wealth as one big payday and start seeing it as small smart decisions that add up over time.

think of it like planting seeds; each one might not seem like much, but together they grow into a forest.

number nine: an emergency fund buys the most valuable asset you’ll ever own.

too many people jump straight into investing, paying down debt, or upgrading their lifestyle only to be blindsided by an unexpected financial hit.

life is full of surprises: job loss, car repairs, medical bills.

without a safety net, these surprises can throw you into crippling debt.

the moment you start earning money, a big part of that should go towards saving 3 to 6 months' worth of living expenses so you can create a financial safety net.

with an emergency fund, you'd have the cushion to land on your feet without any panic or stress.

it's the ultimate financial insurance.

so before you even think about investing, focus on saving those expenses. you're buying yourself one of the most important things you'll ever have: peace of mind.

number ten: never borrow money for things that lose value.

if it doesn't grow in value, save up and pay for it in cash.

far too many people borrow money to buy things that lose value the moment they tap their card.

if you can pay your credit card off every month and take advantage of those rewards, then great!

but that $5,000 vacation can turn into a three-year weight on your shoulders when that interest piles up.

the same goes for new clothes, the latest gadgets, or that flashy car.

they leave behind debt that forces you to pay far more than what it was ever worth.

borrowing should be a tool for assets that work for you, like education that increases earning potential or a home that builds equity over time.

anything else puts you on a treadmill that you can't get off—always chasing the next payment and leaving less room to save, invest, or take on important opportunities.

debt is easy to take on and hard to escape, so don't waste your money on things that are going to drain you in the long run.

number eleven: your earning potential doesn't have to be capped by your education.

if you think your earning potential is limited because you couldn't afford to study further and you keep using that as an excuse for your financial health, well it's time to let that go!

69% of professionals think that skills are more important than a college degree.

now a degree can absolutely help you increase your earning potential, but you're not doomed if you can't afford to study further.

in fact, if you choose the right skill, learn it early, and start gaining experience, by the time your friends graduate, you could be earning four times more than they are.

employers are focused on results; a degree shows that you've completed a program, but it doesn't guarantee that you can do the job.

skills, on the other hand, prove capability.

they show that you can solve real problems, deliver tangible outcomes, and adapt to what the market actually needs.

high-income skills like coding, digital marketing, or data analysis can often be learned faster, applied immediately, and scaled for higher pay.

number twelve: you've got access to a tax-free pot of gold, so use it soon.

now most people spend their 20s thinking they don't earn enough to save or that retirement is too far away to worry about anyway.

but the earlier you start, the harder that money will work for you, and those tax-free retirement accounts should be your second point of call right after you've beefed up that emergency fund.

now with traditional retirement funds, you make your contributions with pre-tax dollars, so when you withdraw them, you're taxed—which can add up to a big chunk of your savings.

but there are also retirement funds where you contribute money that's already been taxed, so when you withdraw it, everything—including the money you've made over the years—is already tax-free.

it's especially powerful for younger people because starting early gives your investments decades to grow completely free from taxes over time.

even small contributions can turn into big, beautiful tax-free nest eggs.

number thirteen: spending more is a psychological glitch, not a necessity.

now spending more has nothing to do with what you actually need and everything to do with how your brain reacts to spending.

the act of buying anything—even something small—triggers a quick hit of dopamine, the brain's reward chemical.

in that moment, spending feels like a reward, but it's fleeting, right?

the brain chases that high again, encouraging more purchases and creating a cycle of instant gratification that overrides rational decision-making.

what actually ends up happening is that you buy loads of cheap small things that break quickly because that's all you can afford.

your brain chases quantity, not quality.

the sooner you realize your desire to spend and buy more is actually your brain glitching, the sooner you'll be able to fix that glitch before it gets out of control.

pick one day a week where you do not spend a single cent; it'll build up financial discipline and make you very aware of when you're spending without a goal in mind.

number fourteen: save your raises, don't spend them.

when you get a raise, your first instinct is to celebrate by upgrading your life—maybe a nicer apartment or a new car.

but the smartest move here is to pretend you never got that raise at all.

if your income jumps by $5,000 a year, put that extra five grand straight into savings or investments.

it's the best way to keep your lifestyle inflation in check while quietly building wealth.

over 10 years, that invisible raise could be worth tens of thousands of dollars in compounding interest.

each time you get a raise, pretend like it never happened—funnel the additional income into savings or investments and you'll stay ahead of lifestyle inflation.

those small, invisible decisions today create a future where money becomes a tool for freedom, not stress.

because real wealth isn't built by what you earn; it’s built by what you keep.

number fifteen: negotiating isn't just for boardrooms.

did you know the people who negotiate their salaries earn an average of $1 million more over their lifetimes?

learning how to negotiate impacts how much you can earn and save—not just once, but over your entire lifetime.

if you're uncomfortable or embarrassed to negotiate or you think it's reserved for big deals and bigger boardrooms, throw that out the window!

you need to know your worth and then you need to have the confidence to ask for what's fair.

it could be a higher salary, a better deal on rent, a lower price for a car—everything is up for negotiation.

one of our favorite lines here at Alux is that reality is negotiable, and you're the one who has to put the deal on the stage.

someone who negotiates a $5,000 raise in their first job doesn't just pocket an extra five grand; they set a new baseline for every future paycheck raise and retirement contribution.

over time, that decision alone can grow into hundreds of thousands of dollars.

negotiation has nothing to do with conflict or greed; it's all about using your charm and confidence to put yourself in a better financial position.

and you know, we've actually got a really good expert course on the Alux app dedicated to improving your negotiation skills straight across the board!

it's called Master Negotiator in 15 Days, and I'll tell you what: if you download the Alux app and scan this QR code on screen as a special New Year's gift from us to you, you'll get a staggering 50% off the yearly subscription!

we want to make sure that 2025 is the year you really make it happen for yourself.

and since you stuck around until the very end, we've got a bonus for you!

and that bonus is to track your net worth, not just your spending.

look, tracking your net worth, not just your spending, is a game-changing financial habit because it shifts the focus from small daily transactions to the bigger picture of building wealth.

stop obsessing over your monthly budget and counting every dollar spent on coffee or groceries while ignoring the one number that truly shows the progress here: net worth.

this is the difference between what someone owns (savings, investments, and assets) versus what they owe (loans, credit card debt, mortgages, stuff like that).

your net worth is like your financial report card; it tells you what you're good at and what you have to focus on to improve.

it makes your blind spots a hell of a lot more visible—like a car loan that seemed manageable suddenly looks like a liability pulling wealth backward, or a stagnant savings account becomes a clear signal to start investing.

when you track where you stand, you take control of where you're going.

and that's all we've got for you today, my friend!

so great having you with us; we'll see you back here tomorrow.

until then, take care, my friend!