Steps to Take as a 20-Something

Financial Advice For Every Decade:
Steps To Take As A 20-Something

You have made it to yours 20s, successfully navigating the challenges of college and beginning to transition into your official adult life. Congratulations!

You may have some anxiety about this transition and the accompanying responsibilities that come with it. Hopefully the years in the recent past have helped prepare you for the days ahead full of new, exciting developments. Now that you’ve made it this far, there are some important financial steps to take in your 20s.

Navigating your financial circumstances will grow more difficult due to many of these changes, but fortunately it will not be unmanageable. Keep your nose to the grindstone. Focus on learning and applying long lasting, time tested financial principles. This article will provide you with a starting point that will hopefully propel you toward becoming a financially savvy individual.


“Reading is essential for those who seek to rise above the ordinary.” – Jim Rohn

My hope for you would be that your financial well-being, and life in general, extends well beyond what is ordinary. As young adults, we are often filled with idealistic viewpoints and lofty goals of what the future will hold. I believe that this is inherently good, and even important for a 20-something’s growth and development. To me, reading can give an individual, especially a young one, new perspectives and the opportunity to learn. Research from Thomas Corley shows that 85% of self-made millionaires read two or three books each month. In my eyes, it is clear that reading can provide nearly unmatched value in your life.

I keep a note on my phone that keeps track of the books that I have read and another note of books that I have earmarked for future reading. Here are some of my favorite books that I have read to this point. 

Your Money or Your Life by Vicki Robin

Rhinoceros Success by Scott Alexander

The Defining Decade by Meg Jay

The Tipping Point by Malcolm Gladwell

Secrets to Closing the Sale by Zig Ziglar

How to Win Friends and Influence People by Dale Carnegie

Some of these are classic personal development or personal finance books, and others are lesser known books from more recent years. All would be a great read to get you started on the path to regularly taking in the written word!


In the same vein as increasing your reading level in general, I would also suggest that you increase the amount of reading in the area of personal finance on the internet. There are a countless number of websites that you will be able to follow, but it is most enjoyable if you find and follow a blog that matches your own personal style. 

At this stage of our lives, there is still so much to learn when it comes to managing our finances, and many personal finance blogs update weekly or more often about the issues and challenges that individuals our age might face. With this flow of information, you will learn so much about the things you can be doing right now to start more effectively managing your financial situation.

Some of my favorites are My Money Wizard and The Penny Hoarder. Check these out to start but keep looking for a blog that you will enjoy following consistently.

These blogs are also effective motivators, driving us to take control of our financial situation while we are still young. By starting now, you will be ahead of schedule on reaching important financial milestones. Society might tell us that “30 is the new 20” or other propaganda with a similar theme, but time is one of the most important elements when it comes to successfully creating your desired financial outcomes. All that to say, start now and your future self will be incredibly grateful.


One of the first steps that you can take to optimize your financial situation is to update your checking and savings account. Up until recently, I was still using traditional checking and savings accounts from a regional bank. Now, I utilize an online bank for both my checking and savings accounts. 

Online banks are often able to offer better interest rates, more effective online tools, and a well-integrated mobile app. While I would be unlikely to suggest an online bank to my grandparents, most people our age have the necessary experience and skills to adeptly manage banking online.

This is an article about online banks from The Penny Hoarder. Start there, but continue to research to find a bank that would fit your needs.


Some financial gurus may tell you to create a budget, detailing what you plan to spend in a variety of categories each month. When using a budget, you have to gather your past expenses and then project what you plan to spend in the upcoming weeks or month. This is no small task and can be relatively difficult to do. 

If you love to do this sort of thing, then by all means, please feel free to create a budget. Personally, I have found that I avoid creating an exact budget because of the initial headache in doing so. Instead, I use an expense tracking app, Clarity Money. This app syncs with my checking account and will track in real time every time I make a purchase with my debit card. The app also produces user friendly charts and graphs that categorize your expenses. Eventually, if you want to take the next step and create a budget, Clarity Money will have your spending information in a format that is easily accessible and digestible.

An expense tracking app is one of the simplest and easiest ways to see where your money goes each month. This article from Business Insider details why tracking your expenses could be preferred over more traditional budgeting techniques, especially for young people whose financial situation still lacks complexity. By starting with expense tracking, you will be able to see how you interact with money and then leverage this information for future use.


After graduating from college and beginning a professional career, it is likely that for the first time in your life a steady stream of income finds its way to your account each pay period. Although your first salary might be small compared to what it will be in the future, there is one financial principle you should apply now as you begin your financial journey. The secret to building wealth and achieving your financial goals of the future is to live within your means, month after month.

It may be tempting to use your new salary to try and ‘keep up with the Jones family’ but taking on debt to do so will be detrimental to your financial situation. Instead, determine the difference between your needs and wants to avoid comparing your situation to other people. 

If you graduated from college, there is a good chance that you utilized a student loan to achieve this milestone. The average graduate has roughly $27,000 in student loan debt. Ignoring this debt is a bad strategy. Your student loan will be with you until you pay it off. Make it your goal to pay off this debt as soon as possible by paying more than the minimum and using any extra cash to help get rid of it. You’ll feel much better when your student loan is in the rear view mirror instead of on the back burner.


If you live and spend like you are still in college but save like the new professional that you are becoming, you will be way ahead of the pack on the path to reaching your long term financial goals.

Several life events in the near future will require a significant amount of cash. In the years ahead, you will likely be purchasing your first home. If you start saving for a down payment now, you will be able to minimize the size of your future mortgage. The best years are behind the older car that you drove in college, and you will likely need a new vehicle sooner rather than later. Instead of going into a significant amount of debt to purchase a brand new car, begin saving now and consider buying a used car when the time comes to make the purchase. This article compares the cost of used and new vehicles and details several advantages of buying used. This theme of saving and purchasing major items in cash should be your main goal in this stage of life.

Establishing savings habits now make the many transitions into the next stage of life go much more smoothly. The average individual in the US will save less than 5 percent of their disposable income (8) and some experts would suggest a savings rate in the 10 to 20 percent range. Challenge yourself to see how much you can save! You’d be surprised how much savings you can squeeze into each month, and you can almost always save more than you think is possible.


New things are happening all the time during this stage of our lives. We are starting our careers, moving to new cities, or possibly even getting married and having kids. It is the perfect time to start anything, so it goes without saying that you should start investing now. The time is money cliche in personal finance may be something you have heard a hundred times, but it doesn’t make it any less true. You can look at this article to see the difference that time can make when you are investing and saving for retirement. 

At this stage in life, your investing strategy should be simple. Don’t try to anticipate or predict what the market will do and don’t allow the brash opinions of others to keep you from getting started. At this point, apply the knowledge you take in from reading credible books and financials blogs (any of the ones suggested above will do the trick) and start investing. In future years, as your wealth accumulates and your financial situation grows in complexity, contact a financial advisor and ask them these questions to determine if they will act in your best interest.


We have already highlighted the importance of living within your means. One of the easiest ways to do this is to avoid chasing after “stuff.” By no means is it bad to want a nicer house, a newer car, or other symbols that could display status but at this point in our lives practically purchasing those items is often just out of reach. It is important to know that “stuff” will never provide you with happiness. There has been a huge amount of research proving this to be true. The desire is not bad, but wait until you can actually afford the big ticket items in the future.

It is not bad to spend some of the income that you have earned working. In fact, you should reap the benefits of your hard work and effort to be financially stable and independent. Instead of rewarding yourself through retail therapy and expensive purchases, focus on experiences that will bring you joy and create a memory. The temporary nature of any possession will quickly fade over time, but a memory that you make of an experience with people that you love will last much, much longer. Try to maximize the amount of joy you receive when spending your hard earned cash.


The importance of having individuals to help guide and mentor us through the different stages of life cannot be overstated. Even though your level of knowledge and expertise has grown exponentially in recent years, there are some things in life that we won’t be capable of understanding until we experience the specific situations. Don’t be afraid to dig in and utilize someone else’s wisdom who has been there before. They’ll know what to do, what to say, and be capable of empathizing with whatever it is you’ve encountered.

If you don’t know where to find a mentor, look in these places first or simply ask an individual that you already know to step into the mentor role in your life. If you have no idea where to start in this process, then this article will prove to be a great resource for you.


Your time as a 20-something  will undoubtedly be enjoyable and full of memories. Start creating good financial habits now to make your future satisfying as well.

Do all this and your 30-something self will be smiling from ear to ear!

          – Myles Jackson

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