10 Money Management Techniques That You Must Follow In Your 20s

10 Money Management Techniques That You Must Follow In Your 20s

Managing money is not as easy as it looks. Especially in the 20s, people tend to spend higher proportions of their income, without thinking much about savings and investments.

The monetary decisions you make in your 20s serve as the building blocks of the financials for years to come. Thus, it becomes crucial to work on building healthy financial habits and devise a money management strategy for better financial stability. 

If you master money management skills right from the beginning of your career itself, your future self will thank you. The other way round, bad or no financial planning could push you into a debt trap, and you may end up exhausting all your hard-earned money.   

10 Money Management Techniques to Master in Your 20s

Here are some proven techniques and strategies that you must follow in your 20s to achieve financial stability and security along with paving the way for a strong financial future.

Know your financial standing first

There is no way to manage money without even knowing what is left every month after taxes. It’s essential to determine your monthly pay first and then, other unavoidable expenses such as food, healthcare, debt if any, etc. Only after deducting these expenses from earnings should you think about anything else. 

Create a budget and stick to it

Creating a budget will help you in making monetary decisions on where, when and how to spend. Budgeting is quite critical from the early 20s itself as it allows tracking the money flow and provides room for adjustments so that you don’t deviate from your financial goals. 

Creating a monthly budget is not that tedious a task, but to stick to it every month demands discipline. There’s no harm in splurging sometimes but making it a habit a month after the other is a warning signal. 

Set financial goals

Setting financial goals is vital because it will keep driving you towards financial stability, savings and investments for a secure future. The best practice is to set long-term, mid-term and short-term financial goals based on your immediate and future needs.

For example, a long-term goal might be for post-retirement, a mid-term goal for a wedding, house or car down payment, whereas a short-term goal could be for the vacation you are planning this year.

Monitor your credit score

The credit score both reflects and affects your financial life drastically. It’s a detrimental factor in deciding the interest rates for a car loan, mortgage loan, credit cards and much more. 

So keep an eye on your credit score to understand where you stand financially and learn ways to improve your score. Make it a habit of analyzing the credit reports periodically and learn how to check your full credit report.

Plan before you buy

Always buy things after preparing a shopping list. It’s an easy trick to save yourself from overspending. Before buying anything first, decide whether there is a need in real.

Once you decide to buy it, look for good deals available around. Generally, there are several offers and deals made in the market by businesses starting from grocery to purchasing a car. If you learn to find a great deal, you will surely save a significant amount of money throughout your life. 

Prepare a strategy for debt reduction

Relook and analyze your total debt regularly. Search for ways to refinance loans at lower rates so that your monthly budget doesn’t get highly affected by the due payments. 

Work on a debt reduction plan and strategy for all loans till they get settled. You can take help from financial experts for advice on techniques such as debt consolidation and debt settlement. If you need a loan with bad credit you should go for credit builder loans.

Start saving regularly

You must start saving parts of your income as early as possible, regardless of your priorities. It’s what the ‘pay yourself first’ strategy teaches you. 

The best thing is that you don’t need any further investment to start earning interest on your money. The only thing you need is a savings account with a trusted institution, which offers the least amount of risk of economic volatility. Review your savings plan periodically and look for opportunities to increase the saved amount. 

Be prepared for emergencies

It’s a great habit to deploy an emergency fund in place, to tackle control situations. The aim should be to save at least three months of expenses to cover up unwanted expenditure such as medical situations, job losses, recession etc. A financial cushion always lends support and reduces stress in unexpected incidents of life.

Focus on career growth, networking and earning potential

Wealth creation should be one of the top priority goals in your 20s since it’s the beginning of the career. The more you earn, the more you save for the future. That’s why it’s vital to concentrate on career growth and acquiring new skills.

Also, building a solid professional network is equally important for getting exposure to better opportunities. All of it will help grow your earning potential over the years. 

Invest your money

Investing is an excellent tool for long-term wealth gain. When done over a long period, investing could fetch you unimaginable returns.

Be its stock markets, mutual funds, real estate or cryptocurrency you must acquire fundamental knowledge of monetary instruments to get the best returns. Otherwise, there is always a risk factor associated with such investments.

Feel free to contact financial advisors for investment tips and decisions.


Money management is an art that should be mastered early on in life. You should never lose grip over your finances so that they don’t come back haunting you at the later stages of life. Effective money management requires effort, discipline, planning and most importantly, the implementation from a person.

A carefully devised budgeting system will bring you back on track even when life throws challenges. If you are under some kind of debt or liability, you need to be on your toes as far as money flow is concerned. You must be aware of where your money is coming from, and where is it going.

If managing finances seem to be a hectic task for you, don’t hesitate to ask for help from financial pros. With their advice, it would become easier to map a road plan for success in personal finance.

Related Posts