There’s no greater feeling than being in your 20s and starting your career. You have endless possibilities! You’re making money for the first time—but what’s the best way to use it? Should you invest it or save it? Whatever you decide, you need to make smart money moves right from the start. Here are twelve financial planning tips for anyone in their 20s starting their career. Soon enough, you’ll be able to tackle your finances like a professional and you’ll have a great financial footing for the rest of your career.
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Understand Your Benefits Package
Job perks involve more than free coffee or casual Fridays so get to know the specifics of your benefits package. Does your company match 401(k) contributions? What’s the deal with health insurance? These benefits are part of your compensation so you should try to make the most of them. It’s almost like giving yourself a raise but without having to ask for one. Really, you never know what you might find.
Set Financial Goals
What are you saving for? A house? Travel? You need to establish clear financial goals so that you’ll stay focused and make smarter spending choices. Don’t forget to break your goals down into small, achievable steps—then celebrate your progress along the way. In doing so, you’ll keep your eyes on the prize and that makes it a lot easier to achieve your goals.
Splitting the Bills with Roomies
Having roommates is a great idea because sharing a space will reduce those huge rent & utility bills. Beyond saving cash, it’s also more fun when you have someone else. Of course, it’s not all easy. You’ll need to lay down some ground rules on who pays what and chore schedules to avoid any unnecessary drama. A few conversations now make a big difference in the long run.
Keeping Tabs on Your Net Worth
Watching your net worth climb as you reduce your debt and increase your savings is a real thrill. Simply put, it involves knowing what you own minus what you owe. It doesn’t even have to be complicated! Lots of apps will help you keep track without breaking a sweat—there’s no excuse not to use them. As such, you should never underestimate the power of keeping your finances in check.
Creating Your Financial Dream Team
Hanging out with people who know what they’re doing with money is great for your own financial choices. It doesn’t matter if they’re investment-smart pals or relatives who are professionals at saving—their habits will rub off on you in the best way. Even if you can’t find them in real life, try going online. There are so many internet communities who are eager to swap tips & experiences!
Setting Financial Boundaries
Similarly, it’s absolutely fine to take a raincheck on pricey plans that don’t fit your budget. Just be upfront with your loved ones about where you’re at financially because most of them will understand & respect your hustle. Naturally, it’s important for you to draw these lines since they’ll help you stick to your financial goals. You don’t want to feel pushed into spending more than you should.
Renting Like a Pro
If you’re looking for a new place, don’t just stare at the rent price. Think about other costs like utilities, parking—and how much you’ll spend getting to work. In fact, it’s sometimes worth paying a bit more for a place that’s closer to your job because it’ll save you money overall. As such, crunch those numbers to find a spot that’s good for your wallet.
Refinancing Those Student Loans
In your 20s, your student loans are probably weighing you down—but they don’t have to. Refinancing them will reduce how much you pay, especially if you have solid credit. Scoring a lower interest rate means you could be looking at smaller monthly payments or even getting out of debt faster. Just be careful if you’re dealing with federal loans because you don’t want to miss perks.
30-Day List for Wants
We’ve all had those times when we’ve bought something on a whim and then wondered why. To stop that from happening, try the 30-day list trick. If you’re interested in buying a non-essential, write it down with today’s date. After 30 days, see if you’re still into it and if it fits your budget—maybe it’s worth it. Most of the time, that impulse to buy fades away.
Learning on the Company’s Dime
Many jobs will cover tuition or training programs and you should take advantage of that. These perks will help push your career forward without draining your bank account. You might even get a degree with their support! There’s really no point in paying for extra certifications when your company will do it for you.
Dating Your Finances
Looking forward to sorting out your finances may seem impossible but it’s really not. Try setting up a monthly “money date” with yourself, where you have a cup of coffee or your favorite snack & some great tunes. Then, look into your budget and spending. Doing so makes staying on track financially a lot more like self-care than a tedious task.
Paying Yourself First
You should always pay yourself first before you even think about bills, groceries or money for fun. Put a piece of your paycheck into savings—it really doesn’t matter how big it is. Every little bit helps for an emergency fund or just your golden years. Treating your savings like a mandatory expense means you’re always investing in future you.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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