A Best-Selling Finance Author Reveals the #1 Money Rule to Follow in Your 20s

Do you have a friend who is always traveling somewhere glamorous, wearing something new, and eating at the trendiest restaurants? Chances are they may be charging it all on their credit card and paying it off bit by bit each month (with some pretty hefty interest rates). Those compounded charges really add up, so it’s time to get real about spending our money before we make it.

The truth is the average American has $3600 in credit card debt at any given point in time, which affects their life for more than just the present time (try putting in a bid on a house without a great credit score). Thankfully, Business Insider tapped Beth Kobliner, best-selling personal finance author of Get a Financial Life, to lay out the one money rule that people in their 20s should always follow.

“Basically, in your 20s, you want to not get into credit card debt,” Kobliner says. “Because remember, if you put something on a credit card that’s charging you 18% [interest], that is the equivalent of earning 18% if you pay it off. But if you’re paying out 18%, you’re losing a lot of money every month.”

Since it’s never too late to start adopting good habits (especially when it comes to your finances), remember to only make purchases you know you can pay off within the next month. Budgeting apps and even an old-school expense spreadsheet should help. And what about if you get yourself into a bit of spending trouble? Kobliner says just work to pay it off as quickly as you possibly can.

Read more rules for taking control of your money on Business Insider, and tell us whether you prefer using a credit card or cash!