How To Manage Money In Your 20s

Since entering my twenties and getting a job, a lot of older adults have advised me to start saving and financially investing in my future. They’re right; it’s important for me to create a financial plan and be smart with my money so that I can reap the benefits now and in the future. But honestly, I was overwhelmed by the thought of starting that process. When you’re faced with a swarm of articles, books, podcasts, lectures and YouTube videos, it can be hard to understand where and how to start building good financial habits. I’m not an expert by any means; I still have so much to learn. But taking the following steps have made the start of my financial planning journey easier. 

1. Determine your goals

In order to develop a good financial plan, the first step is to determine your goals. Goals set the foundation for the kind of financial decisions you make. The financial plan for paying off your student loans will differ from if you’re looking to buy a house or go on vacation. Think of what you want to accomplish in the short and long-term and start from there. Make sure your goals are SMART (Specific, Measurable, Achievable, Realistic, and Time-bound).  

Also, it’s okay for your goals to change or shift as time passes. We can’t predict what happens in our lives, so check in with yourself often and determine if you need to alter your goals.

2. Find a few reputable resources

There’s so much noise from various financial platforms insisting they know what’s best for you. It’s unhelpful to try to listen to all of them at once. I suggest sticking to two or three trusted resources to start with. One website I find helpful is Nerd Wallet. Ensure that the resources you choose have information that is relevant to your money goals. If after finding those resources you decide you want to expand, go ahead. Just don’t get yourself muddled. 

3. Talk to people you trust

When it comes to finances, sometimes the perspective you seek could be right under your nose. There’s value in listening to people in your life discuss their financial successes and failures because of the personal element it provides. 

I’m not telling you to blindly take the advice of family and friends over that of established financial professionals, but hearing from a person you trust about how some financial choices have personally affected them gives you a valuable perspective. 

Closing Thoughts

It’s okay to be overwhelmed. Believe me, I get it. Sometimes I even feel guilty about how little I know. But that’s the beauty of knowledge and experience: If you don’t know the answer, someone else will. Hopefully, these steps will lift some of the pressure off and empower you to start taking charge of your financial future.

What’s the best financial advice you’ve received? Let me know in the comments!