Managing Your Money in Your 20s

When we are in our 20s, we feel invincible a lot of the time. Nothing can stop us, we are going to live forever and the future is so far off in the distance that we never really have to consider it. That’s a myth, obviously, but that doesn’t stop a lot of people in their 20s from thinking that way.

Your 20s is when you can have maybe the greatest impact on your financial future. It is when you are just beginning to earn money in your career and also when you will have the least amount of debt. Managing your money properly in your 20s can set you up for a much smoother financial existence in your 30s, 40s and beyond.

Follow the 50/30/20 Rule

There is a tried and true suggestion for budgeting when you are in your 20s: 50% of your income to necessities, 30% to wants, and the remaining 20% towards savings. This is ideal because it allows you to pare down your debts faster and to save substantially for the future.

Budgeting is not easy, but it’s not hard either. As we all know, information is key to learning new things. To know more about how budgeting can save you in the long run, you could read up websites like Septentrion ( and similar other sites.

Obviously, this is a suggestion. You can always save more if you have the money and it isn’t the end of the world if you save less than the suggested 20%. If you can save anything, save it. Don’t worry about the 20% but try to aim for that as a goal.

Focus on Your Credit

You will hear this no less than 10 million times in your life because it is true: credit is king. If you have good credit, you can do almost anything and pay interest rates that are far more manageable. Focusing on establishing – and paying off – credit cards or loans is a huge benefit to your long-term financial health.

A “good” credit score is in the 700s, far above the average score for millennials today. Spend within your means to resolve your debt, keep your credit card debt as low as possible and focus on making payments on-time. Nothing can derail your credit quicker than missed or late payments and it is a lot harder to undo that damage than it is to create it.

Some debt – such as student loans or a mortgage – won’t be paid off in short order. But making larger than the minimum payments will allow you to pay it off more quickly, meaning less money spent on interest.

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