10 Smart Money Moves to Make in Your 20s for Financial Success

Your 20s are the perfect time to lay the foundation for lifelong financial success. By making smart money moves now, you can avoid common pitfalls and set yourself up for a secure future. Here are 10 actionable steps to take in your 20s.

1. Create a Budget That Works for You

Budgeting is the cornerstone of financial health. Use the 50/30/20 rule—50% for needs, 30% for wants, and 20% for savings and debt repayment. Tools like YNAB or Mint can help you stay on track.

2. Build an Emergency Fund

An emergency fund is your safety net for unexpected expenses. Start with $500 and aim for 3-6 months of living expenses. Automate your savings to make it effortless.

3. Pay Off High-Interest Debt

High-interest debt, like credit card debt, can quickly spiral out of control. Use the debt avalanche or snowball method to pay it off faster. Consider balance transfer cards to lower interest rates.

4. Start Investing Early

Take advantage of compound interest by starting to invest in your 20s. Open a Roth IRA or contribute to your employer’s 401(k). Start with low-cost index funds or ETFs.

5. Live Below Your Means

Avoid lifestyle inflation by spending less than you earn. Focus on experiences rather than material possessions, and save or invest any raises or bonuses.

6. Build Your Credit Score

A good credit score can save you thousands of dollars in interest. Pay your bills on time, keep your credit utilization low, and avoid opening too many new accounts at once.

7. Set Financial Goals

Goals give you direction and motivation. Use the SMART framework—Specific, Measurable, Achievable, Relevant, and Time-bound. For example, save $5,000 for a down payment on a car within 12 months.

8. Learn About Personal Finance

Knowledge is power when it comes to managing your money. Read books like The Total Money Makeover or listen to podcasts like The Dave Ramsey Show.