20 Money Moves to Make in Your 20s
Your 20s are strange financially.
Maybe you're earning more than you ever have before and somehow still don't feel like you have much.
Rent. EV charging. Groceries. Student loans. Insurance. Weddings. Travel. Subscriptions. Food delivery.
And then there's the new iPhone.
Your current one works.
But the camera is better.
Or maybe you're making less, but you feel like you have enough.
The rent gets paid. Your credit card works. Your friends want to go somewhere this weekend.
So you spend.
A nicer apartment. Concert tickets. A trip. Another subscription. An EV that's a little more per month than you planned.
You're living your best life.
And retirement feels very, very far away.
Here's what makes this decade interesting:
You don't need to choose between enjoying your 20s and preparing for your future.
You need a system that lets you do some of both.
Here are 20 moves I would start with.
1. Know Your 3 Numbers
Know:
What comes in. What goes out. What you own minus what you owe.
That's income, spending and approximate net worth.
Once a month, spend 15 minutes reviewing your cash, investments, retirement accounts and debts.
Your net worth may be negative at 23.
That's information, not a grade.
You just need a starting point.
2. Calculate Your “Already Spent” Paycheck
Take your monthly take-home pay and subtract everything already committed:
Rent. EV or car payment. Insurance. Charging. Phone. Internet. Student loans. Subscriptions. Debt payments.
What's left is your uncommitted paycheck.
Before adding another monthly payment, ask:
How much of my future paycheck have I already sold?
A $100 purchase happens once.
A new $100 monthly obligation claims $1,200 of next year's income.
That's different.
3. For Nonessentials, Try the pay-in-full rule
Whenever reasonably possible:
Don't buy a nonessential item unless you could pay for it in full today.
I'm not talking about a home, education, necessary medical care, food or other genuine needs. There are times when borrowing is necessary.
I'm talking about wants.
The new phone. Furniture. Vacation. Designer clothes. Electronics. Upgraded wheels on the EV.
Using a credit card isn't necessarily the problem.
Needing the credit card to afford the purchase can be.
You may still use a card for convenience, rewards or applicable protections. But if possible, have the cash available to pay the statement balance in full.
And whenever something is advertised as “only $42 per month,” translate it back into the full price.
Ask:
Would I buy this if I had to pay for all of it today?
Sometimes you'll suddenly like your old phone again.
4. Build a One-Paycheck Buffer
“Save six months of expenses” can feel impossible when you're starting from zero.
Start smaller.
Try to save one paycheck.
Then one month of essential expenses.
Then perhaps three or more months over time, depending on your circumstances and job stability.
You don't build financial resilience in one weekend.
You build it paycheck by paycheck.
5. Keep Emergency Money Separate
Your emergency fund doesn't need excitement.
It needs accessibility.
Consider keeping it separate from everyday checking, potentially in an FDIC-insured high-yield savings account or another appropriate liquid option.
Why separate?
Because money sitting next to Apple Pay has a funny way of becoming something else.
6. Know what your EV or car really costs
The payment isn't the cost.
For an EV, think:
Payment + insurance + charging + registration + tires + maintenance + parking + depreciation.
If you're renting and relying on public charging, know what you're actually spending.
Check insurance before buying the vehicle, too.
And remember: a car that fits into a monthly-payment calculator may not fit comfortably into your financial life.
7. Learn exactly how your employer retirement match works
If your employer offers a 401(k), 403(b), or similar plan with matching contributions, don't settle for:
“I think they match something.”
Find out exactly what you need to contribute to get the full match and whether it fits your budget.
Then check the vesting schedule.
This matters particularly in your 20s because you're likely to change jobs.
8. Increase savings when your income increases
Connect raises to saving.
If you contribute 5% to retirement and get a raise, maybe increase it to 6%.
Next raise, maybe 7%.
You still get to enjoy some of the increase.
You simply don't let your lifestyle claim all of it.
The easiest time to save part of a raise is before you've learned to spend it.
Don't open a Roth IRA simply because someone on social media told you to.
Understand why you're doing it.
Traditional retirement contributions may offer a current tax benefit, with taxable withdrawals generally coming later.
Roth contributions generally use after-tax dollars, with qualified withdrawals potentially coming out tax-free.
For someone early in a career and currently in a relatively modest tax bracket, Roth contributions may be worth evaluating.
But Roth isn't automatically better for everyone.
Your income, taxes, employer plan, and circumstances matter.
10. Make sure your IRA is actually invested
This happens more than you might think.
Someone opens a Roth IRA.
Transfers money.
Feels responsible.
Three years later, we look inside.
It's still sitting in cash.
Opening an investment account and investing the money are two different steps.
Know what you own and whether your investments are appropriately diversified for your circumstances.
The account is the container. The investments are what's inside.
11. Create a “life happens” account
Not every large expense is an emergency.
Your laptop will die.
Your phone will eventually need replacing.
Your EV will need tires.
A friend will get married across the country.
You'll move apartments and need another deposit.
These are irregular expenses, but they're not exactly surprises.
Consider putting a little from each paycheck into a separate life happens account.
Then life can happen without automatically becoming credit-card debt.
12. Audit your invisible spending
Modern spending is remarkably good at hiding.
Streaming. Cloud storage. Apps. Delivery memberships. Fitness platforms. Gaming. Software. AI tools.
Twice a year, review two months of statements and identify every recurring charge.
Ask:
Would I sign up for this again today?
If not, cancel it.
Don't obsess over one $10 purchase.
Look for the $10 purchase you've unknowingly made 24 times.
13. Build your earning power
Your 20s aren't only about spending less.
They're also about becoming more valuable.
Keep your LinkedIn profile and résumé current.
Finish the degree or credential if the economics make sense.
Take the course.
Learn the technology changing your industry.
Build relationships with people doing work you respect.
Ask:
What could I learn this year that may make me more valuable five years from now?
Your ability to earn may be one of the largest financial assets you have.
Invest in it.
14. Use the time you have now
This won't apply to everyone. Plenty of people in their 20s are already raising children, helping parents or carrying significant responsibilities.
But if your obligations are relatively light right now, recognize what you have:
Time.
Take the certification.
Build the portfolio.
Apply for the better job.
Learn another skill.
Start a small side hustle.
Five hours a week is more than 250 hours a year.
You don't need to hustle every waking minute.
Have fun.
Sleep.
See your friends.
But use some of this decade to make the next one easier.
15. Experiment with a side hustle
A side hustle doesn't have to become a startup.
Maybe it produces an extra $300 a month.
Maybe it teaches you to sell, negotiate, manage clients or price your time.
Maybe you discover you hate it.
That's useful information, too.
Freelancing, tutoring, consulting, content creation, coding, photography, selling something you've made—start with what you already know how to do.
Then decide whether it's worth continuing.
16. Negotiate the whole job, not just salary
A $75,000 job isn't automatically better than a $70,000 job.
Compare:
401(k) match. Health premiums. HSA contributions. Bonus. RSUs. Stock options. ESPP. Student-loan benefits. Disability coverage. Paid time off. Remote flexibility. Commuting costs. Professional development.
Your compensation is bigger than your salary.
So is the cost of earning it.
And when you receive a bonus, consider giving it three jobs:
Past You: Address expensive debt.
Future You: Save or invest.
Current You: Enjoy some of it.
17. Protect your credit — and your ability to earn
Pay bills on time.
Review your credit reports periodically.
Watch high-interest revolving balances.
Be careful about stacking buy-now-pay-later plans simply because each payment looks small.
But don't stop at credit.
Your ability to earn income for the next several decades may be more valuable than everything currently sitting in your investment accounts.
Learn what disability coverage your employer provides.
How much income might it replace?
When could it begin?
How long could it continue?
Your paycheck finances nearly everything else in your life.
Treat it accordingly.
18. Turn every job change into a financial cleanup day
Changing jobs can leave financial debris behind.
Old 401(k).
Old HSA.
RSUs.
Stock options.
ESPP shares.
Insurance.
Unused benefits.
Documents trapped in an employee portal you're about to lose access to.
Before leaving, download important records.
Understand your retirement-plan choices.
Check vesting dates and stock-option expiration rules.
Save equity-compensation records.
Find your HSA.
And don't automatically cash out retirement savings simply because you can.
A job change is a financial event.
Treat it like one.
19. Create a freedom fund
Don't save only for 65.
Save for 29.
Flexible savings may someday allow you to:
Leave a bad job.
Move.
Take time between jobs.
Go back to school.
Start something.
Help your family.
Take an opportunity that temporarily pays less.
You don't know what your future self will want.
Give that person choices.
That's what I think of as a freedom fund.
20. Don't wait until you're wealthy to learn about money
People sometimes think they should meet with a financial professional after they've accumulated significant assets.
There can be value in starting much earlier.
At Sun Group Wealth Partners, we often meet with our clients' adult children while they're young.
At 25, the questions may be straightforward:
How does my 401(k) work?
Should I consider Roth or traditional contributions?
How much cash should I keep?
What should I do with my first bonus?
How do I start investing?
What happens to my retirement account when I change jobs?
What should I know about RSUs?
Those aren't small questions.
They're foundational ones.
We've had the opportunity to begin these conversations with people in their 20s and watch their financial lives develop over the years.
What mattered wasn't finding a secret investment.
It was developing money wisdom early.
Saving before lifestyle expenses expanded.
Learning to invest.
Understanding debt.
Using employer benefits.
Asking questions before making expensive decisions.
And having a financial framework already in place as income and responsibilities grew.
Early financial education can help someone work toward greater financial flexibility over time.
So don't tell yourself:
“I'll meet with someone when I have more money.”
Learning how to manage money before you have more of it may be one of the more useful things you can do.
If you only do five things
Don't try to fix your entire financial life this weekend.
Start here:
Calculate how much of your paycheck is already committed.
Build or add to your cash reserve.
Learn exactly how your employer retirement match works.
Start or increase an automatic savings or investment contribution.
For your next nonessential purchase, wait until you could pay for it in full.
Then build from there.
One last thing
There are two sentences I hear from people in their 20s.
The first is:
“I'll start saving when I make more.”
Then they make more.
And the sentence changes:
“I'm making more. I can afford this.”
That's how starting gets postponed twice.
So remember:
Don't ask only whether you can afford the payment. Ask whether you can afford the purchase.
And don't spend your 20s preparing exclusively for your 70s.
Take the trip.
Go to dinner.
See your favorite artist.
Buy the phone if technology genuinely matters to you and the numbers reasonably work.
But build something at the same time.
Because one of the most valuable things money can eventually provide isn't another thing.
It's more choices.
This material is provided for general educational purposes and is not intended as individualized investment, tax, legal, credit, career or insurance guidance. Financial circumstances vary, and applicable tax, retirement-plan and insurance rules can change. Consider your individual circumstances and consult the appropriate professionals when needed.
Winnie Sun is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Sun Group Wealth Partners, a Registered Investment Advisor and separate entity from LPL Financial.
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