This episode is your personal finance 101. You'll hear the tips and tools to understand your finances and what to do with your money for every stage and scenario in your early 20s. If you don't know where to start with money or feel any shame or aversion around spending, saving, investing, or financial planning, this episode is for you.I wish I had this episode sooner. I gained a ton of value and I know you will too. 

The Ultimate Financial Guide for Guys in Their 20s: Start Building Wealth Today

Getting your finances in order as a young man can feel overwhelming. With countless apps, investment options, and conflicting advice, where do you even begin? Financial advisor Michael Lacivita, who has helped hundreds of clients over his 11+ years in the industry, breaks down exactly what guys in their 20s need to know to build wealth and financial security.

Why Financial Literacy Matters More Than Ever for Young Men

The shocking truth: Less than 5% of people know how much they actually spend each month. Without this basic knowledge, you're essentially flying blind with your money.

As Michael explains, "We're not taught anything about finances as part of our primary school education, which is hugely detrimental when it comes down to breaking your way in the real world."

Step 1: Face the Music - Track Your Spending

Before you can improve your finances, you need to know where your money goes. Here's how to start:

1. Download your bank statements from the past month

2. Categorize every expense - coffee, food, drinks, transportation, etc.

3. Don't judge yourself - this is data, not a moral assessment

4. Identify patterns - What surprised you most?

Common Money Drains for Guys in Their 20s:

• Coffee: That daily $8 latte adds up to $240/month

• Food delivery: Cooking at home can save hundreds monthly

• Transportation: Uber vs. walking/biking/public transit

• Impulse purchases: Especially on Amazon (use the 72-hour rule for purchases over $100)

Step 2: Set Up Your Financial Foundation

Banking Basics

• Open a checking and savings account at a convenient bank

• Set up direct deposit for your paycheck

• Choose a bank with nearby ATMs to avoid fees

Credit Cards - Use Them Wisely

• Pay off balances immediately - credit card debt compounds at 16-30% annually

• Understand the real cost - carrying debt means robbing your future self

Step 3: Build Your Emergency Fund

Target: 3 months of expenses in a high-yield savings account

If you spend $4,000/month, aim for $12,000 in emergency savings. This prevents you from relying on credit cards when unexpected expenses arise.

Pro tip: Open a high-yield savings account earning 3.5-4% interest rather than letting money sit in a regular checking account.

Step 4: Master the 401(k) - Your Retirement Game Changer

Why 401(k)s Are Essential:

• Tax benefits: Reduce your current tax bill

• Employer matching: Free money (don't leave it on the table!)

• Compound growth: Money grows tax-free inside the account

• Forced discipline: Can't touch it until 59½ without penalties

Getting Started:

1. Ask HR about your company's 401(k) and matching policy

2. Start with the match: If they match 6%, contribute at least 6%

3. Increase contributions with every raise or promotion

4. Choose low-cost index funds within your plan

Step 5: Begin Investing Outside Your 401(k)

Why Invest?

As Michael notes, "Inflation is like 3.5-4%. If your money is just sitting in a bank account, it's actually losing value because prices are going up."

Investment Basics for Beginners:

• Open a brokerage account with Schwab, Fidelity, or Vanguard

• Start with ETFs like VOO (S&P 500 index fund)

• Invest consistently - set up automatic transfers

• Think long-term - don't touch this money for at least 5 years

The Psychology of Investing

Biggest mistake: Emotional decision-making

We're wired to perceive short-term market drops as danger, but volatility is normal. As Michael explains, "If you're in your 20s, you're going to see your portfolio drop 20% multiple times. Every two years, you're going to see that at least."

Solution: Check your investments quarterly, not daily. Avoid financial media that creates unnecessary anxiety.

The Compound Interest Advantage

Starting early gives you a massive advantage. Here's why:

Example:

• Start investing $200/month at age 22

• Continue until age 65 (43 years)

• Assuming 7% annual returns

• Result: Over $1 million

Wait just 5 years to start, and you'd have significantly less, even if you invest more per month.

Handling Career Changes and Job Loss

Reality check: The average person changes jobs multiple times. The "40-year career at one company" model is dead.

Job Change Strategy:

• Don't panic if you lose a job

• Use your emergency fund - that's what it's for

• Calculate your runway - how long can you survive on savings?

• Consider it an opportunity to find something better

Michael's advice: "Don't get comfortable at the same place. I found in my experience, the more jobs I've changed, the more money I've made and the better experiences I've had."

When You Get a Raise - Avoid Lifestyle Creep

Got promoted? Here's how to handle it:

1. Increase 401(k) contributions first

2. Calculate your actual surplus (new salary minus old expenses)

3. Allocate the difference strategically:

   • 50% to investments/savings

   • 50% for improved lifestyle

4. Set up separate funds for specific goals (travel, car, etc.)

Beyond Money - Building a Fulfilling Life

Financial success isn't just about numbers. Michael's advice for young men:

Invest in Relationships

• Find your tribe - join sports teams, hobby groups, or clubs

• Prioritize friendships - "I've never had a bad time spending money with friends"

• Combat loneliness - we're living in an age of increasing isolation

Career Happiness Matters

If you dread Monday mornings, it's time for a change. Signs you need a new job:

• Waking up with anxiety about work

• Dreading the alarm clock

• Feeling constantly stressed or burned out

Common Financial Regrets to Avoid

From Michael's personal experience:

• Overspending on clothes - "I look at my closet now and don't wear half this stuff"

• Staying too long at bad jobs - don't sacrifice your mental health

• Not starting early enough - every year you wait costs you significantly

Action Steps to Start Today

1. Track your spending for one month

2. Open a checking/savings account if you don't have one

3. Ask HR about your 401(k) options

4. Start investing even if it's just $50/month

5. Build relationships - join one new group or activity

6. Set financial goals - where do you want to be in 5 years?

The Bottom Line

Financial freedom isn't about being rich - it's about having choices. The earlier you start, the more time compound interest has to work its magic. As Michael says, "Money is just a means to an end. It's just a way to do the things we want to do."

Don't let fear or information overload paralyze you. Start small, be consistent, and focus on progress over perfection. Your future self will thank you.

Ready to take control of your finances? Start with one small step today. Whether it's tracking your spending for a week or opening that 401(k) account, the best time to begin is now.

Key Takeaways:

• Track spending before making any financial decisions

• Prioritize 401(k) matching - it's free money

• Build a 3-month emergency fund

• Start investing early in low-cost index funds

• Don't let emotions drive investment decisions

• Change jobs when necessary - loyalty doesn't pay

• Invest in relationships, not just accounts

Want More Financial Wisdom?

This blog post only scratches the surface of Michael's expertise. In the full Guyset podcast episode, you'll also get:

• Real-time financial planning: Josh and Michael work through a complete scenario for a 22-year-old just starting their career

• Personal money mistakes: Both Josh and Michael share their biggest financial regrets

• Specific investment recommendations: Beyond the basics, Michael names exact ETFs and explains why

• Dating and money: How finances impact relationships and social life

• The "compound interest magic": Mathematical examples that will blow your mind

• Advanced strategies: What to do after you master the basics

🎧 Listen to the Full Episode Here

Subscribe to Guyset on Apple Podcasts, Spotify, or wherever you get your podcasts for more conversations about money, career, relationships, and building the life you want as a young man.

Ready to take control of your finances? Start with one small step today. Whether it's tracking your spending for a week or opening that 401(k) account, the best time to begin is now.

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