10 Tips On Money Management In Your 20s

Once you hit your 20s, it’s time to think about your finances properly. It’s common to make mistakes, but you can try to avoid them if you know what they are.

If you’re bad at money management such as being a compulsive buyer, no savings, or spending beyond your means, then you should read this article. Even some people who are past their 20s still make mistakes or haven’t mastered good money management skills, but building a good habit and understanding your finances early on will definitely help.

Whether you are a 20s adult or living a retired life, it’s still better to have your finances under control. So here are 10 tips on how you can start improving your financial habits at an early age.

1. Find what’s suitable for you

Some people follow the same financial habits as their parents, but as you grow older, learn to find what works for you. If your parents got a joint bank account when they got married, it doesn’t mean you and your partner should also get one.

Getting separate bank accounts doesn’t mean that you don’t trust each other; it just gives you more freedom and fewer chances of getting into an argument.

2. Save as early as possible

Even if you’re working office jobs or paycheck-to-paycheck, you should still consider saving for retirement. This is not just for wealthy people but a proper habit for everyone. You can set up savings vehicles and IRAs. If you have the option, get an automatic transfer from your bank account to savings accounts, so you don’t spend the money. If you do this earlier, you will have more compound interest and receive a hefty sum in the end.

Talk to your employer if the company offers a 401k and if you’re employed, you can get an IRA. If you’re confused, consult a financial advisor about retirement investment vehicles available.

3. Quality over quantity

A sale may get you more items, but buying quality products is a better investment. Aside from these items lasting longer, you may even start spending less because your purchasing standards got higher.

4. Use debt that benefits you in the long-run

When you use a credit card, you’ll be spending more than what you actually purchased due to interest payments. Use it cautiously and don’t spend more than you can afford or keep up with family or friends’ purchasing patterns. It’s best to use debt when it benefits your future such as car loan, home mortgage loan, or student loans.

5. Take care of your debt

If you’ve stopped using your credit cards, you still have to make minimum payments. Avoiding this may lower your credit score and eventually damage your chances at getting a home or landing your dream job.

You have to pay it using regular payments, a lump sum, or, hopefully not, bankruptcy.

6. Have financial goals

After fixing your spending habits, not having a financial goal will get you nowhere. To determine your goals, define what you want for your future and then you can start doing some clear financial planning. Determine your budget and what amount goes to your savings account.

Some common goals people have are being debt-free, having an emergency fund, paying car loans, buying a home, having a retirement fund, and preparing for children’s college funds.

7. Set a realistic budget

Similar to starting a diet, you should also have a budget that you can sustain. Most people are excited when planning their budgets only to realize they can’t do it. Don’t set a restrictive budget, but at the same time, don’t be too lenient.

To set a realistic budget, don’t just guess — do the math! Check your utility bills, grocery receipts, and other expenses. After tallying it up, set your budget with this number and a wiggle room to give you space.

8. Try volunteering

You might not earn money from volunteering, but working for the community will give you satisfaction and strengthen your professional aid. You will also develop people skills and gain experience, which will make you more employable in the future.

9. You need health insurance

You think you don’t need it, but when something happens, you’ll regret not getting health insurance. So even if you’re in great shape, this insurance will make sure your journey to your financial goals won’t be sidetracked. You can get insurance through work or buy through state exchange — just get one so you’re covered.

10. Know more about your emotional attachment to money

To find out why you have poor spending habits, you need to understand your emotional attachment to money. Watch for the triggers and your trigger towards spending, so you know how to control yourself. By knowing what makes you buy, you’re aware of it and stop it. After, you’ll need less effort to form good financial habits.

For some people, they didn’t have much growing up; so when they finally had their own salary, they were excited to be able to afford the things they have always wanted. Some are also triggered to spend because they are bored, celebrating the little things, or had a bad day.


Before you regret your mistakes when you reach your 30s, avoid them by knowing the common mistakes and avoiding them in your 20s. Use this knowledge to start forming your healthy financial habits and do proper money management. It’s not too late to change, you can do it right now so you become financially free even before you turn 30 years old.

Based on Materials from: Money Crashers
Photo Sources: Ticotimes, Pixabay, Money Crashers, Pexels, Investopedia