Your 20s are a fantastic decade full of discovery, growth, mistakes, and successes. It’s a wonderful time to explore all that life has to offer but it’s also the best time to build a financial foundation that will set you up for decades to come.
There are thousands of blog posts and YouTube videos about there about personal finance moves and money musts in your 20s. Most share the same common advice and I agree that it’s generally good advice! I’ve read hundreds of these posts over my decade of being in my 20s so today I am sharing what I think are the best personal finance moves to make by age 30.
In your 20s you likely are constantly comparing yourself to your peers to see how you stack up. Its the reason why we all love to see lists about what your net worth should be at a certain age or what goals you should hit by 30. While these are just suggestions it’s important to remember that your pace is ok no matter when you hit certain goals. Instead it is best to aim to do the best things you can for yourself during your 20s.
Create an emergency fund
Creating an emergency fund sounds like a very adult thing to do and it’s one of the first things you should start working on in your 20s when you are employed.
Having an emergency fund will allow you to weather potential storms like a layoff or car repair while you handle other financial goals like paying off debt or saving for big expenses.
You can start with $1,000 in savings and then work toward having 3 to 6 months of expenses saved.
Read more: How to build an emergency fund
Create a budget that works
Giving your money a plan by creating a budget is one of the best moves you can make in your 20s. When you have money coming in you need to direct it toward your goals and expenses in order to continually move ahead.
Creating a budget allows you to best utilize your income for big goals while still allowing yourself to have a life including guilt free spending (because it’s in your budget to buy those shoes!).
Finding the right budgeting style for you might take trial and error but don’t throw out all of budgeting just because one style didn’t work for you. Test out one of the most common methods and keep trying til you find what works for you.
Read more: How to create your first budget
Plan for big expensive life goals
During your 20s you will like hit a lot of big but very expensive milestones like planning a wedding, buying your first home, getting a pet, or starting a family.
There are many expensive lifestyle adjustments that will occur during this because you you’ll want to plan ahead for them. This means creating rough budget estimates and beginning to save in advance so you’ll be able to afford these big things without going into debt.
Read more: First time home buyer tips
Save for your retirement
Yes retiring in 40 years sounds very far away and like there is plenty of time to save. However, the earlier you start saving for retirement the less you have to save overall because of compound interest. You should begin by saving with your 401k at work especially if you get an employer match. Always contribute enough to get the employer match. If you do not have access to a 401k then you should start investing in a Roth IRA. Starting to invest and investing throughout your 20s will significantly set you up for a better future.
Read: Tips for beginner investors
Pay off high interest debt
If you’ve got debt from college then your 20s is the time to pay it back/ If you’ve got other debt like high interest credit cards then you should pay that debt off aggressively. Prioritizing your high interest debt and paying off all debt besides a mortgage can help you setup your next decades for less stress and less payments so your income is able to be used for other things.
Read more: How to setup a debt snowball
Increase your credit score
While some financial experts suggest you don’t have a credit score at all, your score is actually a very important tool for buying a home and even getting certain jobs. If you have student loans then you will have a credit score until it’s paid off so you should work on increasing your credit score in other ways. A higher credit score will allow you to get better interest rates of big debts you’ll need to take on like a future mortgage.
Resource: Use Credit Karma to check your score for free
Invest in yourself
One of the very best investments you can make in your 20s is to invest in yourself. If you have extra discretionary income consider using it to invest in yourself rather than just spending it all.
Investing in yourself means doing things like continuing education in your career field, taking a course to learn a new skill, or starting a side hustle.
Investing in yourself will pay off in the long run better than many other things you can do in your 20s. These types of investments can increase your long term earning potential and generally give you a better life.
Read more: Side hustle ideas for moms
Learn about personal finance
Maybe you learned about how to handle money from your parents or a class in high school or maybe you still feel clueless. In either situation you still likely have more to learn about personal finance topics and educating yourself in your 20s is a must do. Whether you listen to fun money minded podcasts, subscribe to budgeting YouTube channels, or read personal finance books like Your Money or Your Life ($9) and Total Money Makeover ($15), it is important to learn about the best ways to handle money.
Read more: 25 Frugal Tips I’ve Learned From The Debt Fee Community
Use Your 20s To Build A Foundation
Those are a few of the best things you can do during your 20s to better your current financial life and set yourself up for an even better future. Your future self will thank you for taking your finances seriously and getting things on the right track before you turned 30.
Your 20s is a a great time to save and build a strong foundation for the rest of your life. It’s the perfect time to take advantage of a low expense living situation, ability to work a lot, and the power of compounding interest.
In my opinion the best personal finance move you can make before 30 is to educate yourself about money. Don’t let someone else handle your money without understanding your money and why they are doing the things they are doing. The more you understand and take control of your personal finances, the better your life will be. Education and empowerment in personal finance will completely change your life…. so do it before 30!
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.
Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.