5 (Life-Changing) Money Moves To Make In Your 20’s

millennial money moves

Your 20’s are a crazy time of life.

Graduating college, starting your first job, getting your first apartment, maybe buying your first house.

So many new and exciting experiences. 

It’s also an incredibly confusing time.

Do I stay at home or move out?

Do I start contributing to retirement?

What do I do with all this debt?

All of these decisions can be incredibly overwhelming, none more so than the decisions involving your money.

As an almost 29 year old about to embark on my last year in my 20’s, I’m not going to sit here and shake my finger at you and tell you how wise I am now, and all the mistakes you shouldn’t make.

I remember people doing this to me and I hated it.

I believe you need to create your own path. You need to have ownership of your decisions.

Now with that being said, there are also times where you just need to listen.

This is because as a 20-something year old, you cant possibly know all the right things to do with your money.

money choices


Listening to the advice from people older than you can be incredibly powerful and life changing.

For me, that advice was to stay home after college and pay off my student loan debt.

That’s what my older brother suggested I do, and I thought he was absolutely crazy.

My initial thought was No WAY! That sounded miserable to me.

Sure enough though I listened, and two years later I was 45k debt free and in a way better financial position than any of my friends. So needless to say, I’m happy I listened.

Which brings me to the point of this article.

If you follow these 5 steps with your money you will change the rest of your life.

This is the advice worth listening to.

Don’t look back on your 20’s and wish you took action

You have the opportunity to make it happen now.

Let’s jump in!

1. Save up a 1k-2k Emergency Fund

Life is full of surprises  A flat tire on your way to work. Dropping your cell phone and shattering the screen. Dropping your glasses in the ocean. (This happened to my friend last week)

You know, those once in a while annoyances that make you say “WHY ME!”.emergency fund

Actually, more like “Fu** Me!”

Well if you have an emergency fund in place, those annoying moments don’t have to be so bad, and they certainly don’t need to break the bank.

Having an emergency fund allows you to pay for those surprises without interrupting your financial plan. They shouldn’t even be called surprises. They are expected occurrences, which is why having an emergency fund is an absolute must.

Bring it on flat tire!!!

2. Set Up Your Investment Accounts

This step is as simple as it sounds. Set-up your accounts, that’s it.

I know far too many people that are now in their late 30’s and never invested because they didn’t know which company to use or they don’t know which form to fill out. It’s just enough discomfort to say “ehh, I’ll figure it out later”, and then that’s it. Before you know it, 10,15 years go by, and you never gave yourself the chance to start investing.  Don’t let that happen.

The three investment accounts you should set up are your Roth IRA, 403b/401k, and if you have it, a 457b.

I’ll explain each in more detail.

Roth IRA

A Roth IRA is a self-directed retirement savings account that allows you to save money for retirement in a tax advantaged way. Money you contribute is post-tax, and you can contribute up to $6,000 in 2020 if you are below the age of 50.

A Roth IRA can be set-up easily through any bank or brokerage firm. I personally recommend Vanguard or Fidelity because of their great reputation and easy to use online platform, but that’s totally up to you. If you’re interested, check out this quick and simple Instagram post from @personalfinanceclub that walks you through setting up a Roth IRA with Vanguard! I recommend investing in low cost index funds. My favorite is VTSAX!


A 403b,401k and 457b are all employer sponsored retirement savings accounts. Since it is employer sponsored, you must check to see which of these (if any) are offered by your employer. Investment contributions are automatically deducted pre-tax (traditional) or after tax (roth) from your paycheck, and grow tax-deferred in your investment account. The max contribution for each of these accounts is $19,500/year in 2020.

Since these accounts are employer sponsored, you must go through your employer to set them up. Choose a vendor provided by your employer, select your investment options, and fill out a salary reduction agreement with your employer to allow money to be taken from your paycheck. I strongly recommend choosing a vendor that offers low cost index funds. Avoid vendors that have high fees!

3. Contribute a small amount to each account

 This step is purely psychological.

It’s important  to feel the “win” of investing and to not feel like you are falling behind amongst your peers.

keep up

If a friend asks if you set up your 403/401k yet, you can say YES. If someone asks if you contributed yet, you can say YES.

Keep in mind that many investment products have a minimum deposit amount of 1k-3k. So you may need to save up a little bit to invest in the product that you want.

4. Pay off ALL non-mortgage debt 

Obviously, if you have no debt you can skip this step, but I’m sure for most of you debt is a reality.

This is the only step on the list that isn’t simple.

I’m not going to sugar coat it, this is going to suck. In fact, it’s going to suck a lot.

Many of your friends are going to be buying new cars, overpaying for fancy apartments, and going on lavish vacations.

If you do your debt payoff right, THIS IS NOT GOING TO BE YOU.

You’re going to be living at your parents for as long as they’ll have you, drinking cheap beer, and driving your rundown car until the fender falls off.

Your life will not be sexy by any stretch of the imagination.


Unlike your friends who blindly spent their money to fuel their ego, you will be debt free by 30 and in the perfect position to substantially grow your net worth.

5. Contribute as much as possible toward your retirement investment accounts

If you get to this step before the age of 30, you’re awesome! Now is when you really get to capitalize on your efforts.

At the point you’re debt free, your investment accounts are ready to go, and you’re ready to start building your net worth.

Traditional wisdom says to contribute 15% of your income toward retirement.

This is a nice goal to shoot for at first, but ultimately we want to aim for a much higher savings rate.


Well without taking into account a pension, a 15% savings rate would mean you still have to work for 43 years until being able to retire.

savings rate

                               (Assuming a 5% return after inflation and using the 4% safe withdrawal rule)

If you’re goal is financial independence, I would aim for something closer to a 20% savings rate and then work up from there.

It might mean side hustling and cutting out expenses that don’t bring you value, but the tradeoff is that you will be in the fast lane to financial independence.

The Bottom Line

Many 20-something year olds don’t take this type of action with their money because they think it will prevent them from having fun or they believe it limits their golden years. This is the furthest thing from the truth.

I had an incredible time in my 20’s. Traveled for cheap, made memories with friends, and eventually moved out from my parents house to get my own apartment. Looking back it felt like I sacrificed very little.

Just because you’re taking these steps with your money does not mean you are missing out. You’re just doing things a little differently, and differently in this case means you have full control of your finances.

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