7 Financial Moves You Should Be Making in Your 20s

You might be fresh out of college and just starting the feverish job hunt. Or maybe you’ve been working for a couple of years now, and are just getting used to the idea of having a steady income. Maybe you realized you want to go back to school in order to secure yourself higher pay and the hope of more status. Whatever stage of the game you’re at in your 20’s, it’s important to know that this time is essential for your financial health later on.

Some small, easy to implement changes you can put in place now can have lasting effects for decades. So, as you think about your finances in your 20’s, take a look at these 7 easy moves you should make!

Prioritize savings

It may seem like you have your whole life ahead of you to focus on savings, but by starting a serious savings in your twenties, you give yourself an extra decade for your accounts to grow. Not only does this mean you have more time to put money away, it also means there’s more time for interest to grow. Given that not having enough money to live on is one of Americans’ top retirement concerns, this one is especially important.

Pay down debts

Before you get serious about having kids or buying a house, it’s a good idea to pay down your existing debt. Whether that’s a car payment, student loans, or credit card debt, you don’t want that money hanging over your head, rather than in your bank account. If you’re paying the minimum amount on your loans or credit card, try to cut back on eating out and instead put that money toward debt repayment. The you in your 30’s will thank you!

Consider investing

You have to risk money to make money! However, that doesn’t mean you have to make Wall Street bets in order to carve out a stable financial future. There are plenty of investment accounts out there where you can invest in a diverse portfolio and bring in a steady investment income to boost your savings. This is a great way to increase your retirement, but also to plan financially for a wedding, down payment on a house, or a new car!

Start to seriously budget

Budgeting is key if you’re hoping to have a steady financial future. Sure, you could wing it, but you know how that goes: you get an email from your credit card company saying you’re near your credit limit and you have no idea how that even happened. Instead of going with your gut, make a solid plan for your budget, and plan out the things that you will spend money on.

Learn to say no thank you

This goes hand-in-hand with budgeting: sometimes, there will be things that you just have to say “no thanks” to. Your friends want to go out for another night on the town for the third weekend in a row. Or maybe your girlfriend wants to go see an expensive concert last minute. Whatever it is, if you know that you can’t afford it, it’s important to know how to say no. It doesn’t have to be mean; just be frank. Say, “hey, I’d love to go, but I’m really close to going overbudget this month so I don’t think I’ll make it.” Your friends will understand. If they don’t understand, they’re not your friends.

Stash away cash for emergencies

Life sucks, emergencies happen. That’s just the way of things. It’s better to have some money put away just in case, that way you don’t get caught flat-footed in the event of some unforeseen calamity. Most experts recommend saving up 3 to 6 months’ worth of income for just-in-case scenarios. This will help you on your job hunt if you get laid off or have to quit, and will be enough to cover most medical expenses.

Remember to have fun

This may seem contradictory with the previous bits of advice, but it’s really every bit as important. Remember, you’re only young once. While being crazy-frugal and stashing away everything you earn may seem wise, and it’ll certainly help you in the future, it’s essential that you have fun while you’re young. Go to that concert (within your budget!), take that road trip, go backpacking in Portugal. Just be sure that as you plan your financial future, you leave a little room to live your life in there too!