Money Tips for the Twenty Something Crowd

by Ryan Guina

This article is part of the Money Matters for All Ages group writing project. See the bottom of this article for the full list of participants and links to their articles. Please check back daily as I will update the links as new articles are posted! Also, if you are blogger and would like to join into the discussion, feel free!

The twenties are an exciting time in one’s life. I know, I’m still living my 20’s – although on the tail end. 😉 For those in your 20’s, now is a great time to set the financial pace for the rest of your life. While you may not think it matters much now, setting a strong financial foundation now will pay dividends later in life.

Set your Financial Foundations

Your 20’s is the decade that will set the pace for the rest of your adult life. You are on your own financially, and no one will take care of you and your financial future; it is up to you! Now is the time to learn how to make a budget, spend less than you earn, create good spending habits, and invest – all while trying to live a normal life and not deprive yourself. Don’t worry, it is possible to be financially secure in your 20’s and still enjoy life!

Get out of debt

Debt will drag you down and prevent you from achieving not only financial freedom, but the freedom to enjoy your life. Unfortunately, when you are just starting out, it is very likely you incurred some debt along the way. Student loans, a car payment, furnishing your first apartment, buying your first professional wardrobe, etc. The important thing is to stop adding new debt, and reduce the debt you currently have.

A great way to quickly eliminate your debt is to snowball your debt payments by paying your minimums plus adding whatever extra money you can find to the principal. Here are more debt reduction principles.

Build an emergency fund

An emergency fund gives you a buffer to help keep you from going into debt, or further into debt if you are already there. Everyone needs a different amount in their emergency fund based on their family and career situation. A good rule of thumb is to have 3-6 months of salary easily accessible in an interest bearing savings account. You never know when an emergency will strike, so be prepared.

Invest in yourself and your career

Your career and your ability to create income is your greatest asset. During your twenties, you should be more concerned with taking the job that offers you the most professional opportunity – not necessarily the highest salary. Professional opportunity is the currency that will define your options as your career progresses and lead you to more satisfying and higher paying positions.

Your twenties is a great time to add to your resume by earning a master’s degree, taking professional certifications or training courses, or working in several different positions to broaden your professional horizons.

Invest for your retirement

While you are in your twenties, you may not earn the largest salary of your life. But in my opinion, the money you invest in your twenties is more important than the larger amounts you may be able to invest when you are in your 40’s. Why? Time. The longer you have your money invested, the longer your money will compound and grow. Time is the greatest advantage to any investment, and in your 20’s, time is the thing you have the most of.

Prepare for life changes

Your twenties will prove to have many major life changes. Graduating college, major changes in employment, getting marriage, children, buying a home, backpacking through Europe for 6 months and spending your life savings… Who knows what will happen? As part of preparing for life changes, you should also take great care to protect your financial interests, including earning money from alternate sources and buying disability and life insurance.

Take calculated risks

You will never succeed unless you put yourself out there. Your 20’s is the decade you have the best opportunity to take a chance and make something big happen. Start your own company, travel the world, write a novel, or take a job simply for opportunity or pure enjoyment rather thank strictly based on pay. There is little reward that comes without risk. Do your research, weigh the odds, and do something amazing.

Live your life and enjoy it

Life is not measured in dollar$ and ¢ents. Your 20’s is perhaps the most exciting decade in terms of pure excitement and change. Most people in the young 20’s have fewer obligations preventing them from going out and doing something spontaneous. Use this time to your advantage. Have fun. Live your life. Find yourself. Now is the best time to do it.

Here’s are the other articles in the Money Matters for All Ages series:

Published or updated September 6, 2016.
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{ 13 comments… read them below or add one }

1 FourPillars

Very upbeat post! Makes me wish I was in my 20’s again. 🙂



2 CiaranFromChance

Great post Ryan I really enjoyed it. Especially like the advice under the headers, Take Calculated Risks and Live Your Life and Enjoy it.


3 My Dollar Plan

Great ideas. I’m glad you included thinking about the long term but also having fun! Life is too short to not have fun;)


4 Ryan

Mike, I think the 20’s is the best time to make progress and set the path you will follow for the rest of your life. Of course, there is always time to change course, but if you get on the right path to being with, it’s that much easier.

Ciaran, thanks. I try to live my life by those words. 🙂


5 fathersez

Great post.

I am forwarding this link to my two senior daughters. I am sure they will find this very useful.

If I may, I would like to suggest that they should also seek a peer group that takes pf seriously.


6 Amanda @ Me vs Debt

Great roundup here! I’m a mid-twenties gal always looking for money tips : )


7 Ryan

Hello fathersez,

I’m sure your daughters will welcome these tips and the other advice you give them. These tips are helpful to anyone starting out on their own financial path, but are by no means all-inclusive. Surrounding yourself with peers who take personal finance seriously is a great way to increase your own knowledge as well as help keep you on the right path. Great idea! 🙂


8 deepali

I’m with fathersez – just like healthy eating, healthy spending is influenced by your peers… It would be nice if “keeping up the joneses” meant seeing who could fund their IRA the fastest (wow, that was the geekiest thing I’ve ever said!). 🙂


9 Ron@TheWisdomJournal

Great post. I wish someone had told me these tips 22 years ago. I’m just grateful that I’ll be able to help my kids learn the ins and outs of personal finance . . . assuming they’ll listen!


10 David

I remember my 20’s, the good ole days. 🙂


11 atta

I really liked this post, and being in my 20s myself, it all makes sense.

However, one objection I have is to the “buying disability and life insurance” part. Why should a 20-something with no dependents buy life insurance? Buying life insurance, for most people in their 20s, would be a waste of money.


12 Ryan

atta, great point about insurance. When I was in the USAF we had the option of buying life insurance through the military. I purchased $10k, which cost me $0.80 per month. At less than $10 per year, I felt good knowing that if I passed on, my family would have plenty of money to bury me. But that is the only amount I purchased. I knew guys who were single who spent close to $25 per month on life insurance. Their reason – “well, if I die, I want my family to get the money.”

Sorry… I’d rather keep the $300 per year for myself.

As for disability insurance, if you are single, who will help take care of you if you are injured and can’t work? Tough call, but since disability insurance is usually very inexpensive for most younger people, it can’t hurt to get a little.

If you are married though, I definitely recommend disability insurance and life insurance in most cases, and always if you have children. Thanks for the comment. 🙂


13 Peter B.

1. Pay off college loan debt with automatic monthly payments.
2. Live small. Buy the smallest, cheapest home you can live with and pay if off before retirement. Do not count on your home’s appreciation value for retirement funds. A paid off home is a cheap place to live during retirement.
3. If you want to buy a car, get a reliable beater. Get insurance for $25/month from Insurance Panda. Forget about buying a house until your debts are paid off.
4. Only one credit card per family. Keep it in a lock box for emergency use only. If you can’t buy with cash, you can’t afford it.
5. Be careful as you develop your retirement portfolio. The Bush years taught us not to trust the stock market and banks. Gold, cash, rare stones, high end collectables, rental properties, cottage industry cash and at-work saving accounts with a big employer contribution will keep the money in your pocket. Roth IRA’s are also a good way to save without excessive taxes. Avoid annuities, and accounts that make more money for the bank than for the clients.
6. Assume that everyone wants a piece of your retirement portfolio. Beware of con artists-they come in all forms. If it seems to good to be true-it is.
7. If possible, use public transportation and cut back on car ownership. You will save a bundle.
8. Plant a vegetable garden. Learn to can and freeze food.
9. Do not buy long term health care insurance. The rates are too high to keep the policy going as you retire. It’s a sucker play for young adult money.
10. Eat out once a week. Make a shopping list and learn to cook. It’s healthy and you’ll save a lot of money.
11. Cut off cable TV and watch shows online. You’ll save over $100.00 per month.
12. Create your own power (sun, wind, whatever cuts the price of heating, electric and gas.)
13. Co-op services. Barter when you can for goods and services.
14. Work at home several days a week. You’ll save on gas and meals.
15. Shop the educational market for a cheaper graduate education.
16. Live in a neighborhood with good public schools so you can skip the cost of private schools.
17. Constantly look for ways to save and cut the budget.


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