Your twenties are such a fun time of life! You are at the start of your career, you get to build new relationships, create new experiences, and set out on new adventures. Everything is new, fresh, and exciting. But it can be all too easy to push off assessing your personal finances and creating your financial goals.

So… how do your financial goals impact your life as a 20something? In just about every way possible! By taking control of your finances in your twenties, you are setting yourself up for a lifetime of success down the road.

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Financial Goal #1: Pick a career path

The career you choose is going to have a pretty big impact on your financial goals and security. Make sure you give it a lot of thought and pick a career that you will enjoy AND pay the bills.

Did you know that most people will change careers between 5-7 times during their lifetime? If you start a career and find out it’s not for you, make a change!

Personally, I am in the process of changing careers because I was not happy with the “starving artist” lifestyle that I was living as a professional opera singer.

Don’t get me wrong--I love to sing, perform, and teach music, but I also want to pay the bills.

Use your 20s to explore what you want your career to look like and how to leverage it for your financial success.

Financial Goal #2: Figure out your total debt

Calculating your total debt is scary, but don’t let that stop you from doing it!

Create a spreadsheet listing all of your credit card balances, auto loans, student loans, mortgages, etc. and their corresponding interest rates. Add up the total debt you owe, minimum payments, and create a plan to start paying off your debt as quickly as possible.

Calculate your total debt and make a commitment to pursue a debt free life!

Financial Goal #3: Create a zero-based budget

When you have figured out how much debt you owe, it’s time to take the next step in achieving your financial goals and create a zero-based budget.

Budgeting is a critical part of financial planning, and you absolutely need to start a budget during your 20s. I spent the first two years of my 20s thinking that “I didn’t need a budget because I knew what I was spending money on.” and I was so. wrong. 

After tracking my spending habits, I realized that I was wasting hundreds of dollars a month on silly purchases that could easily be avoided.

If you don’t tell your money where to go, it will disappear.

Make a budget. 

Financial Goal #4: Stop living paycheck to paycheck

Now that you have a budget, you can stop living paycheck to paycheck! 

78% of Americans live paycheck to paycheck--and a large part of this comes from people living above their means.

To stop living paycheck to paycheck, you need to make a commitment to get out of debt and start using self discipline with your finances. This goes without saying, but the more your spend, the less money you will have leftover.

By living below your means, you will stop living paycheck to paycheck. 

If you need some inspiration on how to cut back on spending each month, check out my post on “Frugal Living: The Best Money Saving Tips That Actually Work”.

Financial Goal #5: Create an emergency fund

This financial goal should be at the top of everyone's list.

An emergency fund is there to keep you from going back into debt to pay for unexpected expenses like car accidents, a piece of technology breaking, losing your job, global pandemics (is it too soon to joke about that?), etc. 

Most people will tell you to have around 3-6 months of income saved for your emergency fund.

Not having an emergency fund is one of the primary reasons I always had credit card debt in my early twenties. I was surprised financially every time I needed a new set of brakes or when I cracked my phone screen. Because I was never financially prepared, I always had to put the expense on my credit card--which added so much avoidable stress to the situation.

Accidents happen, people lose their jobs, and things do break. But I promise that you will breathe a lot easier if you have an emergency fund to cushion the fall.

Financial Goal #6: Start saving money

Once you have your emergency fund in place, your next financial goal is to start saving for the financially free life you want to live!

Save for Retirement:

When you start saving for retirement early, you reap the benefits of compound interest and ensure that you can maintain your lifestyle throughout retirement.

Save for a Down Payment:

Buying a house is a huge investment, and if you want to save the most money on interest, then experts recommend purchasing a home with a 15 year fixed mortgage rate. To do this, you need to have a good credit score (somewhere in the mid-700s) and be prepared to make a 20% down payment on the value of your home. 

In other words, if you wanted a $300,000 home, you would need to make a $60,000 down payment.

We can all agree that $60,000 isn’t cheap, so it’s best to start saving as soon as possible!

Financial Goal #7: Get A Side Hustle

A side hustle is a job that someone works in addition to their full-time job to make extra money. Getting a side hustle is an awesome way to save and speed up the process to achieve your financial goals.

No matter what you do for a living, you can totally start a side hustle!

Some popular side hustles include caregiving, teaching/tutoring, photography, event planning, and web services. Check out my post on 60 Side Hustles You Can Start This Year for some more ideas!

Financial Goal #8: Fix your credit

Your credit score is essentially a numerical representation of your financial health, and it impacts more than just getting a new credit card! Your credit score is factored into so many things from being approved on a lease, loan, or even getting a new job!

More employers are starting to check applicants’ credit histories to see if they can be trusted with company assets and finances. Meaning, bad credit can limit your job prospects--yikes!

Pay your bills on time, and start paying down debt to increase your credit score.

Financial Goal #9: Get Insurance

A lot of 20somethings don’t feel much urgency when it comes to insurance, but that doesn't mean we are immune to unpredictable life events.

If something scary like a car accident happens and you don’t have insurance, you will be in for a world of financial hurt. Protect yourself from unforeseeable circumstances by picking a quality insurance plan from a reputable company. 

The most important insurance plans you should have are life, health, long-term disability, and auto insurance. 

You may thank yourself later.

Closing Thoughts

As Dave Ramsey says, “Live like no one else so you can live like no one else.”

Time is money, so take advantage of your twenties to set yourself up for the financial success that you want later in life.

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