In Your 20s? Master These Financial Habits for a Successful Future

Think that smart financial habits begin when you land the corner office? Not true! In fact, learning financial fundamentals early can help ensure we can take smart risks and are well-established as we grow our careers. While these are good reminders at any point in our lives, time is money! If we master these habits in our 20s, they have a lifetime to pay off.


Develop A Budget You Can Live With

One of the most important financial habits we can establish is budgeting. It is core to almost every other financial skill, and getting this right will help all our other goals fall into place. Our 20s is a great time to try out different styles and budgeting tools. Are you a cash envelope or an app gal? Find out now what works for your life so that budgeting becomes second nature!


Start Saving For Retirement

Thanks to the time value of money, even saving a little today translates to big gains in savings goals down the road! As soon as you start that first job, become educated on your options for retirement savings through your employer. As a first step, make it your goal to save enough through that plan to max out whatever matching contributions they’ll make to your own savings. Self-employed? Read up on other retirement savings products and find a fit for your own financial goals.


Develop a Side Hustle

The smallest of side hustles can add up to unique skillsets and major resume enhancers over time. Our 20s is a great time to experiment with part time work and freelancing opportunities. These may not always translate to your primary career objectives, but can give you a great window to explore personal passions as well as experiences that compliment your primary career.


Become Financially Literate

Understanding finance can seem intimidating. Couple that with most of us feeling like we don’t need financial literacy until we make big money, and we’re often left deferring financial literacy until much later in our lives. Take small steps now to become comfortable with all aspects of finance. Tune in to a weekly podcast or brush up on the business section of your favorite periodical to make the topic manageable.


Learn to Monetize Your Talent

Our skills, talents, and experiences are the primary drivers of our financial potential over our lives. Early in our careers is a great time to experiment with developing talents that we’re not sure how to monetize. For example, if you love writing but a major paper’s staff position seems like a stretch, start making unpaid contributions to a local paper, your church newsletter, or a new small business in your community. Over time that portfolio of work builds up to an impressive portfolio that can be sold to bigger clients!


Use Credit Wisely

Smart credit usage in your early 20s ensures that you can finance major purchases like a home or car down the road. Most of us start building that credit with small balance credit cards, so be sure to couple any credit spending with a structured plan to pay it down. It’s nearly impossible to get started in life without some debt. At this point, don’t get terribly hung up on being entirely debt free, and focus on slowly and deliberately building credit history.


Invest in Quality

Our 20s is a good time to start making smart choices about where to save and where to invest in quality “assets” that can be smarter purchases over the long run. For example, trying to decide between the Ikea mattress or something a little more luxe? If you’re able to save up a bit and wait, purchases like these can be ones to start thinking about investing in. This prioritization will be different for everyone, but here are some ideas for where to save and where it makes sense to invest.


Practice Living Below Your Means

Get in the habit now of spending way less than you earn. Lifestyle creep can sneak up on the best of us. Every hard-earned raise early on in your career can feel like (and is!) an awesome accomplishment. Instead of running out to treat yourself with the entirety of your new found fortunes, think about splitting the goods with your current self and future self. Did you get a 3% raise this year? Go you! Send 1.5% percent of that straight to your retirement savings before the change hits your paycheck. You won’t miss it and you’ll still have some fun money for celebrating your hard work.


Get Smart About Insurance

Insurance planning can be tricky in our early years. Too little can leave us with unnecessary expenses in emergencies and too much can feel like a waste of your hard-earned cash. An important rule for insurance in our 20s is to truly take the time to review what you need for your personal situation. Many of us just end up cribbing off of whatever company, plan, or broker our parents used, and that may not fit our life stage. Meet with a professional to be sure you have the basics covered in health, car, and homeowner’s or renter’s insurance.


How did you utilize your 20s as a way to become more financially responsible? What do you wish you had done earlier? Tell us in the comments!

  • Madiha ~ MeVsTheOdds

    This is great! I made a list of ten goals I wanted to achieve in my twenties and this just seems so ideal! It’s great advice! Budgeting is super duper important but always hard if you’re a spender!
    P.S. Mind if I leave a link for this article in my post? I think my readers will relate quite a bit!

  • Daeyz

    These are great tips! I’m learning to become more aware of my finances, as well as channeling my talents into a side hustle! Will keep this post in mind for future reference!


  • Taste of France

    Re debt, first, it’s always better to be debt-fre. That is part of living within your means. But financially, interest on savings accounts are around zero; stocks have historically delivered around 7%. If you are paying 18% on credit card debt, there are no low-risk (note: LOW risk) investments or places to save that give you that kind of return. Think of savings as stepping forward and debt as stepping back. If you are stepping back faster than forward, then maybe you need to focus on not stepping back. (And opting for high-risk investments isn’t very smart–such investments are for people who have tons of money and who can afford to gamble–because it is like gambling–part of it for high stakes.)
    That said, everybody should have at least three months of savings to tide them over in case of job loss.

    • Taste of France

      I should add another caveat: absolutely max out on an employer-matched 401(k). That is free money from your employer. Do not walk away from it.

  • These are really good because to become successful women we need to start by knowing how to handle money even from young age. Because I’ve been moving quite often to few countries, I learn to always have money saved up no matter what.

  • Life.stylespiration

    Great tips, my favourites are: become financially literate and invest in quality! Those two really stand out for me.

  • Thanks for this! I’m definitely saving it for future reference – I’m trying to invest in my future a lot more right now!

    I hope you have a lovely Friday!

  • This is so important. I’m in college now and I’m starting to think about my money and especially my credit because I do plan on buying a house in the near future. I’m also so wanting to be as independent as possible.
    Teenage Wayfarer

  • These are such great tips and so important to know when you’re in your twenties. I like to have a spread sheet with all of my earnings and spendings, this makes me stay on top of where my money is going and how much I am saving.

  • Diana Maria

    This is a wonderful list and one I could definitely get on board with! I want to start saving for my retirement, and have a side hustle going for sure. Thank you for these tips! Your photography is beautiful by the way xx

    Sending love & light your way,

    My Lovelier Days

  • This is so valuable! Becoming financially literate is one of my major goals this year, and I’m diving into learning about wealth management. Learn what you need to know before you need to know it! I also love the tip on living below your means – we’ve been doing that for years and it’s amazing how much freedom it gives you.