Financial Checklist for Your 20s | Financial Tips (2024)

FAQs

How to financially prepare in your 20s? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.

If you don't already have a checking and savings account, it's time. Not only is a checking account necessary for paying bills and accessing your cash, it's a sign to future creditors, employers, and landlords that you can responsibly manage money.

Most people, even in their mid-to-late 20s are still struggling to establish themselves. That can be hard to do if your job isn't paying you enough, you're struggling to make rent, have no savings, and are being crushed by debt.

By age 25, you should have saved at least 0.5X your annual expenses. The more the better. In other words, if you spend $50,000 a year, you should have about $25,000 in savings. If you spend $100,000 a year, you should have at least $50,000 in savings.

“Ideally, your savings should reach $20,000 by the time you turn 25,” says Bill Ryze, a certified Chartered Financial Consultant (ChFC) and board advisor at Fiona. The national average for Americans between 25 and 30 years of age is $20,540.

Aim to have three to six months' worth of expenses set aside. To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount.

Gen Zers face greater obstacles to financial success

Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, but they are also carrying larger student loan balances.

Is your 20s your hardest years? ›

They might, in fact, be the years when you feel your worst. Research shows that, across our life span, mental health follows a J-shaped curve: it declines from childhood to young adulthood and then it rises steadily in the decades after that.

Rule of thumb? Aim to have three to six months' worth of expenses set aside. To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount.

Spend 50% of your after-tax pay on needs —like housing, utilities, health care expenses, minimum debt payments, and other essentials. Use 30% to pay for wants — such as clothing, entertainment, social outings, vacations, and dining out. ​Set aside 20% for financial goals — like building your savings or paying off debt.