Managing Your Money in Your 20s | CCCS of Rochester
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Managing Your Money in Your 20s

For many starting their careers in their 20s, focusing on finding a job, keeping the job, and getting their career on track is enough to handle. But it’s also a time for making big decisions and setting goals, and even people in their late 20s who have put some time into their career should be thinking of the future—which starts with building healthy habits around how you spend your money. Ultimately, deciding to spend smart now, will help you attain your goals later in life.

Even though you may have gotten into the groove of your professional life, no matter what you make, whether it’s $38K or $80K, you must manage your money wisely. As you navigate your career and long-term goals, here are some steps you can take to ensure financial well-being:


It may seem like an obvious solution but budgeting your dollars each month can help keep you from overspending. This means knowing where your money is going, including groceries, rent, loan payments, utilities, and recreation. Setting up direct withdrawal for expenses like student loans can ensure you don’t miss payments. There are different strategies toward budgeting that might appeal to you and budgeting apps that are helpful and easy to use.

As part of your budgeting efforts, track your purchases. If you’re spending too much on clothes, entertainment, or eating out, you can modify your spending behaviors and self-correct back onto your course. A simple breakfast sandwich or cup of coffee each morning can add up more than you realize. Experts also suggest waiting 72 hours before making any big purchases. This way, it gives you time to think about whether you can afford it, or need, or want it.


There are multiple ways you should be saving each month. This includes a savings account that serves as an emergency fund. Ideally, you should build it up so that it can cover three to six months of your expenses in the event you lose your job, your cash-flow is reduced, or you have an emergency. To ensure you save each month, set it up so a portion of your check is deposited into your savings account. The emergency fund is meant to be fluid, so if you find yourself needing to dip into it now and then, don’t worry. Just keep building it back up.

You should also be saving for retirement. That may seem like a long way off, but the payoffs are much bigger the earlier you start saving for the future. What does this mean? If your company participates in a 401(k), especially if it’s a matching program, make sure you enroll. If your company doesn’t offer one or you’re a freelancer, you can take advantage of an individual retirement account (IRA) and deposit a percentage of your money into it each month—15% is recommended.


This might be more pertinent to someone just starting their career, but building and maintaining good credit is critical to qualifying for lower interest rates for any loans. Opening a credit card can be a great way to do this, but make sure to pay it off each month so that it doesn’t get out of control. While credit cards can be a great option to establish good credit, if you don’t handle with care, you could be paying on more debt than you already have for a long time. 


If along the way you find yourself struggling with debt and financial management, you can always ask for help. Credit counselors can help you build a budget that works, and if your debt is steep, they may recommend a debt management program, which is designed to help you pay off your debt affordably and efficiently.

A lot can happen in your 20s as you establish your career, grow relationships, and make big moves. Taking control early on of your financial habits will only help you lead a more successful life where your goals are within reach.