15 Financial Goals for Your 20s: More Money Now!

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Tips For How to Be Smart With Your Money In Your 20s

Today I want to discuss financial goals for your 20s. Because there is never a better time in life to set a strong financial foundation.

At this age, it’s very important to assemble the components of your financial safety net. Start developing the right financial habits. Identify and make progress on savings goals in your 20s. And finally, begin investing in your 20s.

I will put it together in a list of financial goals for your consideration. With tips on how to tackle each one. When you are ready for more. Tackle this next set of financial goals in your 30s.

Let’s start with a summary of our best finance tips for 20-somethings so you know where we are headed…

Financial Goals For Your 20s

Assess your current money state
Read a personal finance book
Put the right insurance in place
Establish an emergency fund
Establish a monthly budget
Reduce costs to save money
Reduce, eliminate, and refinance debt
Monitor your credit score
Start a side hustle
Start saving for retirement
Save for a down payment on a home
Invest in yourself
Start investing in financial assets
Find a money mentor
Monitor your money

Next, let’s dig into each of the financial goals for your 20s. Because your financial goal-setting days as a student are over.

Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.

1. Make An Honest Assessment Of Your Current Money State

Get your financial facts together. This should be your first of several short-term financial goals to accomplish now.

What is your net worth? In your 20s, your net worth might be negative.

Many people like you and me start with nothing. Other than large amounts of debt.

How much money do you spend and where do you spend it? Do you have investments? Then, what are they and are they the right investments for your 20s?

You can put off some financial goals for later in life. But not this one.

To summarize, the first of our financial goals for your 20s is to get familiar with your finances.

2. Read A Personal Finance Or Investing Book

You can’t go wrong learning more about personal finance. Or, investing. Start setting your finance knowledge base.

So pick a book on a finance topic of your choice. And, set a financial goal to read it front to back.

Looking for an inspiring money book to read? Then, read Everyday Millionaires by author Chris Hogan.

It’s full of examples. About how people like you and I came from nothing to become millionaires.

Another one of my favorite money books. The Minimum Wage Millionaire. It was written by a gentleman named Bill Edgar.

This book was written for his teenage daughters. Since you are reading this, you are probably not a teenager.

On the other hand, Minimum Wage Millionaire is full of great advice. The book is for anyone that would like to manage their money better.

And have more money. Especially when setting financial goals for your 20s.

3. Put The Right Insurance In Place

A major accident can cripple your finances. Whether that accident is health-related or property-related.

Not carrying the right insurance in the proper amounts is a huge financial risk. Insurance is a must when considering financial goals for your 20s.

Here is a simple rule of thumb. Insure only what you can’t afford to lose.

That means having enough insurance on big-ticket items. Like your health, vehicles, and home. Also, your life, if others are financially dependent on you.

Appropriate medical and disability insurance is a must. Health care services can be very expensive. And make most financial goals in your 20s out of reach.

So, think about this financial goal example very carefully. Be sure to carry the right amount of insurance.

Here’s a checklist of the most important insurance coverages to think about putting in place during your 20s:

Health: For unforeseen health and medical expenses
Disability: In case an accident leaves you unable to work
Life: When someone is dependent on your income
Auto: If you own or lease a car
Home Owners or Renters: Depending on your living situation

Your employer will typically have plans that cover the first 3 insurance types. So, check there first. Then, fill in any gaps as you see fit.

Since I don’t want important savings goals in your 20s to blow up on you. Because of not having the right insurance in place.

4. Establish An Emergency Fund

Another one of many smart financial goals for your 20s is to build an emergency fund. Why? You know, stuff happens.

People lose their jobs without notice. Health issues can come up and accidents occur. Also, cars break down and can need costly repairs.

These are just a few examples of when an emergency fund can come in handy.

One rule of thumb is to save 3-6 months of living expenses. Set this money aside in a risk-free high-interest savings account. Then, don’t touch that money unless you have an emergency.

5. Establish A Monthly Budget

Having a budget is very important. If you don’t have one, it should be one of your top financial goals to achieve in your 20s.

It doesn’t have to be complicated. Pencil and paper are fine. A spreadsheet or free online software is better.

When preparing your budget, expenses should be no more than income. Look for ways to create excess cash where income exceeds expenses by as much as possible. More on saving money goals in your 20s in a bit.

I think of a budget as a monthly cash flow statement. Just like a business prepares.

But don’t let that scare you off. Learn to treat your finances like a business. Furthermore, check out this article on exactly how to prepare your cash flow statement.

It’s critical to know how much money is coming in. And where that money is going. That is what your personal cash flow statement is for.

6. Reduce Expenses To Save Money

Now, I will be the first to tell you that it’s difficult to scrimp and save your way to money success. It takes more than just achieving savings goals in your 20s to have financial success.

But, living below your means is important. Especially when trying to set and achieve financial goals in your 20s.

Think about your spending on the 4 big-ticket items listed below. Then consider how you can reduce your costs and save money. Here are the big spend categories that will likely pop out of your budget.

You know. That budget you just prepared is one of many important aspects of setting financial goals in your 20s!

Housing
Automobiles and transportation
Food and beverage
Leisure activities

So consider a monthly amount to reduce your expenses. As part of setting the financial goals in your 20s.

Think about it this way when financial goal setting. Can you reduce expenses by 5% or even 10%?

Most financial experts suggest saving 10% of your earned income at this age. By reducing expenses, you can achieve this financial goal.

Resource: Save on all of your online purchases with Rakuten

7. Reduce, Eliminate, Refinance Debt

Another of our top financial goals for your 20s is debt payoff. And to not take on any new debt.

Solid debt management is one of the important financial steps to take in your 20s. So, how do you go about it?

The first debt to look at is high-interest debt. That being your credit cards.

Interest rates on credit card debt are very high. There is no better use for your excess cash than paying off your credit card bills. Paying off your credit card debt as fast as you can is a great example of a short-term financial goal.

Then look at your automobile loan. If you have one.

Next up is student loan debt. The average interest rate on student loan debt is about 6%. This isn’t too bad.

But I suggest you pay off your student loan debt after your credit cards. And after paying off your auto loan.

Everyone’s debt situation is different. The rule of thumb is easy to remember. Pay off the highest interest debt first. Then move on to the next highest.

Here’s another way to tackle your debt. Refinance it.

When interest rates are lower, reduce interest costs by refinancing. Consolidate and refinance under a loan consolidation program.

8. Monitor Your Credit Score

Your credit score is important. So, consider setting a financial goal in your 20s to monitor your credit score regularly.

A good credit score can mean a difference in several areas. Getting a loan, being able to use a credit card, or getting a job offer from a prospective employer.

So be sure to protect your credit score, improve it, and check regularly. If you are having success with the goals we have already discussed. Then, your credit score should take care of itself.

Resource: Check your credit score for free with Credit Karma

9. Start A Side Hustle

The list of side hustles is endless these days. The internet has matched people with goods and services to sell to those that are willing to pay for them.

And maybe your side hustle will become a financially profitable business endeavor in the future. Why not give it a shot?

Walk dogs. Drive for Uber. Start a blog. Create an e-book or product for sale. There is no better time in your life than your 20s to earn some extra cash on the side.

But, one word of caution. Don’t let your side hustle interfere with your main source of income. Your primary job or career should be your priority.

Resource: Make some extra cash taking consumer surveys

Next, let’s talk about 2 important savings goals. Because there are no shortages of things to save for when setting financial goals in your 20s. But, some are more important than others.

10. Start Saving For Retirement

Saving for retirement may seem like a long-term financial goal. But you shouldn’t think of it that way.

By starting early and investing that money wisely, the amount necessary to save is much less. So, start saving for retirement in your 20s, and you will be glad you did.

Here’s how…

Most employers sponsor qualified retirement accounts. They are also known as 401(k) or 403(b) plans.

These plans offer several advantages. First, your money can be invested before any taxes are taken out.

For example, let’s say you invest $10 and you are in the 22% tax bracket. That means you save $2.20 in taxes.

So the $10 investment costs you only $7.80 out of your pocket. This is a great way to stretch your investment dollars while trying to achieve financial goals in your 20s.

Furthermore, your money grows without being taxed. Until you take withdrawals in retirement.

This puts more of your money to work each year. Making it easier to hit savings goals in your 20s.

Since you do not have to pay taxes on any of your investment gains. Or, dividend income.

Finally, most employers will contribute to your retirement account. It is called a company match.

So, make sure you participate at the minimum level to maximize the match. This is part of your compensation package. Don’t waste it.

So, if you are not participating in your employer’s 401k. Then doing so should find its way into your list of financial goals in your 20s.

Remember the most important thing. Just sign up and start. Even if you only save 1% of your income. You will be glad you did.

But, what if you don’t have access to an employer retirement plan? Then…

Funding An IRA Account Is A Great Financial Goal For Your 20s

Opening and funding an IRA is an excellent financial goal for your 20s. But you need to know, that there are two types of IRAs.

There is a tax-deductible IRA. This type of IRA works similarly to your company’s retirement plan. Specifically, contributions are made pre-tax.

Then there is a Roth IRA. In the case of a Roth, your contributions are made after-tax.

But you never have to pay another penny of tax after that. Even when you take withdrawals in retirement.

In the case of both accounts, your money grows without being taxed. Throughout your pre-retirement years.

11. Save For A Down Payment On A Home

Buying a home or condo in an area you desire can be a good financial goal for your 20s. But first, you must save for a down payment.

Then that down payment becomes equity in your real estate. After you make your purchase.

Rather than paying rent, your mortgage payments increase your equity ownership in your home each month. And hopefully, the value of your home appreciates over the long run too.

Start saving for a home down payment today. But think carefully before you make a purchase. Be sure to choose an affordable place to live. Because homes come with a lot of hidden expenses.

After you have your savings goals in your 20s set. It’s time to start thinking about investing.

12. Invest In Yourself

The best investment you can make is in yourself. Especially for making the best of your finances in your 20s. Because you have a lifetime of income in front of you.

Figure out what you are good at. Then, put in the time and effort to be great at that skill.

Take advantage of every training opportunity you have access to. What options does your employer offer? Either on-the-job training or more formal continuing education is beneficial.

The best thing about learning on the job is it has no out-of-pocket cost to you. It is one way to achieve a financial goal in your 20s without spending money.

Higher education is also an option. But be careful, make sure that your degree will provide a return on your investment.

Finally, every year set at least one goal to improve yourself. Over the long run, doing so will increase your income-producing capabilities.

Resource: Improve your resume using MyPerfectResume

13. Start Investing In Financial Assets

We talked about investing in retirement plans. That should be your priority. To take advantage of the benefits those plans offer.

But perhaps you are having success trimming expenses out of your budget. Also, making money with a side hustle, getting raises at work, or earning a nice annual bonus from your employer.

Then, it’s a great opportunity to start investing in your 20s.

First of all, choose an amount you will invest each month. And make automatic deposits of money from your checking account into your brokerage account or savings account.

Automating monthly investments is a great way to invest in small amounts. And, take advantage of dollar-cost averaging.

You can choose to invest in financial assets that produce income. Interest and dividends are some of the most passive income you can have.

Open a brokerage account, if you don’t have one. And invest in stocks.

Online brokerage accounts are free and easy to open. I use the Webull app. It is an excellent option for buying and selling stocks commission-free.

I prefer investing in dividend growth stocks. But, if you are not up to picking stocks, go for a low-cost exchange-traded fund (ETF).

Resource: Invest in stocks using the Webull app

14. Find A Money Mentor

It’s important to keep learning about money. And having a mentor is a great way to learn.

There are potential mentors everywhere. They do not have to be formal mentoring arrangements. They can be authors or television personalities.

So find someone who has had success with financial planning in their 20s. When it comes to money, a parent, family member or close friend are the best options. As long as they have achieved some level of financial success.

Ask them questions and see what you can learn.

Most people are happy to talk about what they have accomplished. And how they went about it.

15. Monitor Your Money

Set a financial goal in your 20s to monitor your money every month. Keep an eye on things.

Refresh your budget monthly. Calculate your net worth and watch it grow. Because success breeds success.

By looking at the current state of your financial affairs, new financial goals will start to become obvious to you.

Resource: Monitor your money with Personal Capital

Financial Goals For Your 20s: Wrap Up

Want to know how to be smart with your money in your younger years? Then set good personal financial goals.

Here is a summary of 15 tips to master your finances and achieve savings goals in your 20s and beyond.

Assess your current money state
Read a personal finance book
Put the right insurance in place
Establish an emergency fund
Establish a monthly budget
Reduce costs to save money
Reduce, eliminate, and refinance debt
Monitor your credit score
Start a side hustle
Start saving for retirement
Save for a down payment on a home
Invest in yourself
Start investing in financial assets
Find a money mentor
Monitor your money

Plan, set, and achieve these financial goals by 30. Then you can start setting your sites on mid to medium-term financial goals.

My Favorite Tools To Achieve Financial Goals For Your 20s

I mentioned several resources throughout the article. And have summarized them here for your convenience. Best of all, most of them are free to sign up and use on your financial goals in your 20s.

Author Bio: Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.

Financial Goals For Your 20s: Plan, Set, & Achieve