10 Money Moves I Made in My 20s That Set Me Up for Life
Your 20s are often a time of exploration, growth, and figuring out who you are. It's also one of the most critical decades when it comes to building a strong financial foundation. While it may feel like there’s plenty of time ahead, the decisions you make during this period can have a lasting impact on your financial future.
Here are ten money moves I made in my 20s that set me up for life—and how they can help you too:
**1. Created (and Stuck to) a Budget**
One of the first steps I took was creating a budget. Whether you use apps, spreadsheets, or pen-and-paper, tracking your income and expenses is essential. By understanding where my money was going each month, I could identify areas to cut back and allocate more toward savings and investments.
*Tip:* Start with the 50/30/20 rule—50% of your income goes to necessities, 30% to discretionary spending, and 20% to savings or debt repayment.
**2. Paid Off High-Interest Debt**
Debt can be crippling if not managed properly. In my early 20s, I had credit card debt from my college years. Instead of letting it snowball, I prioritized paying off high-interest debt as quickly as possible. This freed up cash flow and saved me thousands in interest payments over time.
*Tip:* Use the avalanche method (paying off debts with the highest interest rates first) or the snowball method (starting with the smallest balances) to tackle your debt strategically.
**3. Started Investing Early**
The power of compound interest cannot be overstated. Even small contributions to retirement accounts like an IRA or 401(k) early in life can grow exponentially over time. I began investing in index funds and ETFs, which provided steady returns without requiring constant attention.
*Tip:* If your employer offers a 401(k) match, take advantage of it—it’s essentially free money!
**4. Built an Emergency Fund**
Life has a way of throwing curveballs, and having an emergency fund ensures you’re prepared for unexpected expenses like medical bills, car repairs, or job loss. I aimed to save at least three to six months’ worth of living expenses.
*Tip:* Automate transfers into your emergency fund so saving becomes a habit rather than a chore.
**5. Avoided Lifestyle Inflation**
As my income increased, I resisted the urge to upgrade my lifestyle immediately. Instead of buying a new car or moving into a fancier apartment, I continued living modestly and redirected extra income toward savings and investments.
*Tip:* Before making big purchases, ask yourself whether it aligns with your long-term goals or if it’s just temporary satisfaction.
**6. Learned About Personal Finance**
Knowledge is power, especially when it comes to managing money. I read books, listened to podcasts, and followed blogs about personal finance to educate myself on topics like budgeting, investing, and wealth-building strategies.
*Recommendations:* Check out classics like *Rich Dad Poor Dad* by Robert Kiyosaki, *The Simple Path to Wealth* by JL Collins, and *I Will Teach You to Be Rich* by Ramit Sethi.
**7. Invested in My Education and Skills**
While formal education isn’t always necessary, continuous learning is key to career advancement. I invested in courses, certifications, and networking opportunities that helped me develop valuable skills and increase my earning potential.
*Tip:* Look for low-cost or free resources online, such as Coursera, LinkedIn Learning, or YouTube tutorials.
**8. Practiced Delayed Gratification**
Instant gratification can derail even the best financial plans. Whether it was skipping impulse buys or waiting for sales, practicing patience allowed me to allocate my money more wisely.
*Tip:* Implement a “30-day rule” for non-essential purchases—wait 30 days before buying something to ensure it’s truly worth it.
**9. Diversified Income Streams**
Relying solely on one source of income can be risky. To mitigate this, I explored side hustles and passive income streams, such as freelancing, blogging, and renting out unused space.
*Tip:* Find hobbies or interests that align with market needs and turn them into additional revenue sources.
**10. Focused on Long-Term Goals**
It’s easy to get caught up in short-term pleasures, but keeping long-term goals in mind kept me motivated. Whether it was buying a home, traveling the world, or retiring comfortably, these aspirations guided my financial decisions.
*Tip:* Write down your goals and review them regularly to stay focused and accountable.
Making smart financial choices in your 20s doesn’t mean sacrificing all fun or living frugally forever. It means being intentional with your money and setting yourself up for success in the future. By taking these steps early, you’ll create a solid foundation that will serve you well throughout your life.
What money moves did you make in your 20s? Share your story in the comments below!