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Boss Babe Chronicles

Finances•Finances

12 Good Money Habits To Start In Your Twenties

March 4, 2020

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12 good money habits to start in your twenties- How to master financial planning early on

Your twenties are a great time to develop good money habits. These personal finance habits can be carried out throughout your life, and if you start as soon as in your twenties (or earlier, if possible!) you will be well on your way to your financial goals.

Part of the reason why I’m writing this post is that I definitely did not have many healthy money habits in my early twenties. I did not know how to budget, and any money I had left after paying my bills was used as fun money.

And that is why this post is an important one for me. I truly believe that money management is such a crucial skill to learn at a young age, but especially in our twenties.

Our twenties are a time when a lot of people go into debt, either because of student loans or because of credit card bills. It’s also really easy to damage your finances when you first start getting paid for a “real, grown-up” job, so everyone must start getting educated about money as soon as possible.

So without further ado, here are 12 good money habits to start in your twenties that are going to help you reach your money goals.

Create a budget

Having a budget is one of the simplest and most crucial ways to start financial planning. With a budget, you are less inclined to spend more money than you need to.

A budget is a plan that you set yourself for your money where you make your cash work for you and your needs. Having a budget is going to help you establish spending limits and set you on your way to responsible money habits.

If you have not ever set yourself a budget before, don’t worry. There are many different budgeting apps you could try as well as many helpful blogs that are going to help you figure out how to budget, and how to actually stay on track with this new financial direction you are taking.

Budgeting is going to also help you with the next money habit, which is to…

Start saving

You knew this was coming, didn’t you? Saving money for your future should definitely be at the top of your financial priorities.

Sometimes though, it can be easier said than done, especially when you are not making a lot of money and are drowning in debt.

In times like these, it is still good to save, even if you are just saving $50 a month. When you get into the habit of saving, it becomes easier for you to put money away later on in life too, no matter what your salary is.

If you find that saving even $50 is a challenge for you, it might be a good idea to find some work-from-home jobs you can do to create an extra form of income. Online jobs are becoming increasingly popular because there are a lot to choose from, depending on what your interests are and how much free time you have.

Click to learn HOW TO MAKE MONEY WITH A SIDE-HUSTLE
You might also enjoy: 20 CREATIVE WAYS TO SAVE MONEY YOU WILL LOVE

Set specific financial goals

Having financial goals is great because it keeps you motivated to work towards something you actually want to achieve.

Financial goals are very subjective and not one size fits all. One person’s financial goal might be to become a millionaire by 50, and another person’s goal might be to get out of debt by 30. It all depends on you and your specific circumstances.

Once you know what your goals are related to your finances, you can start coming up with a plan.

If you are someone who has a lot of debt and wants to pay it off before you turn 30, look at how much you owe. Then, calculate how much you would have to pay every month until you reach 30 to pay it all off.

Sometimes, you may find that you can’t reach those goals in the exact time frame you set out for yourself. And that’s okay. In that case, set smaller goals which will ultimately get you to your bigger goals and to where you want to be with your finances.

Pay off your credit cards

A big thing that many of us struggle with financially is credit card debt.

If you’ve racked some of that up, there are ways to go about credit card debt which will make your life a lot easier.

A good rule when paying off credit cards is to look at your debt in chunks rather than looking at the whole number. For example, say your debt is $10,000, you can divide that up into four $2,500 payments. Sure, the balance you owe is still the same, but this way makes it a little bit more manageable to pay off because it’s a less overwhelming approach.

Also, if you carry a balance on more than one card, it is good practice to pay off the one that has the highest interest rate first. This way you will be saving yourself from higher interest fees.

If you can afford to, pay a little more than the minimum balance. When you do this, it is going to help you pay off that debt much faster. That, of course, leads to less interest you have to pay.

Don’t impulse shop

Impulse shopping regularly isn’t the best money habit you can have. Not only does it potentially lose you a lot of money, but it also makes you buy a lot of stuff that you probably don’t even need.

I’m not saying that going shopping once in a while is going to completely mess up your finances. However, there is a smart way to shop that is going to be more effective than impulse shopping.

A simple way to shop with a purpose is to have a shopping goal. Before you go out, make a list of the things you need to buy, and stick to that list.

If you feel like you really want something that isn’t on your list, tell yourself that if you still want it the next day, you will come back for it. Chances are, you will not really feel like going back to get it. That will tell you that you didn’t really want that item in the first place.

Start an emergency fund

I read somewhere that most Americans don’t even have $300 tucked away for emergencies.

And I’m not going to lie. For a long time, I didn’t have it either. It wasn’t until I actually had an emergency that I realized how important having an emergency fund is.

If you are in the same boat I was in, it is never too late to start. Make saving for an emergency fund a priority, and put as much in it as you can. $300 is a good start and eventually, move up to $1000.

If things ever go wrong, you will be glad you planned for a rainy day.

Have a retirement plan

You may think that your twenties are too young to start planning for retirement. I disagree! You never know what might happen in the future. The sooner you start investing in your golden years, the easier you will have it later on.

For information on how to plan for retirement, Dave Ramsey has an excellent article here about how to start your retirement plan which you can read about here.

Pay your bills on time

A very good money habit to have is to learn how to pay your bills on time.

I don’t know about you, but I hate remembering about an overdue bill at the end of the month when I don’t have much money left over.

Getting things paid for on time is going to save you a lot of grief down the road.

A good rule to follow is to pay all your bills on payday after you have paid yourself first. If you are interested in learning about more financial habits to get into at payday, head on over to my post about PAYDAY HABITS THAT WILL MAKE YOU GOOD AT HANDLING MONEY.

So whenever you get paid next, have a checklist ready that has all your bills for the week or month. Pay them off one by one, and you will see how good it will feel to get that financial burden off your back right away!

Educate yourself

Financial education is one of the most important things you can invest in.

I was brought up in a household that didn’t really talk about money. That resulted in poor financial decisions on my part throughout my early twenties.

Thankfully, we have the internet. That’s where I learned a lot of what I know about finances. There are so many good blogs on personal finance out there, all it takes is some digging.

Another good form of financial education is by reading personal finance books. I love books on finances because I always learn something new from each of them.

There are plenty of books out there on how to get out of debt, how to save, how to have a good money mindset, and even on investing. Some of my favorite books on personal finance are in the link below!

7 BEST BOOKS ABOUT PERSONAL FINANCE

Don’t spend more than you have

This goes without saying, but spending money you don’t have will most likely get you in financial trouble.

Credit cards are a good tool to have, but you need to use them mindfully. If you use credit cards, you need to know how to use them properly for your advantage.

Otherwise, you end up paying more money than you spent on them to cover the fees that come with paying them too late.

Here are some useful tips regarding being wise with credit cards:

  • Make your payments on time. Not doing this will affect your credit score.
  • Stay below your credit card limit.
  • If possible, save up for what you want and pay in cash.
  • Don’t impulse shop. Make a list and stick to it to avoid unnecessary purchases.

Have separate bank accounts

Having a couple of bank accounts definitely helps with staying on top of your finances.

I have one spending account, and one savings account. Whenever I get paid, I transfer money over to my savings account and leave it there.

A good trick I learned is to only take my spending account card out with me. That way, I won’t be tempted to spend what’s on my savings card. My savings account card stays in a safe place at home and I make it a point not to touch it.

This really helps me “forget” that I actually have more money that is on my spending card. And that’s the whole point in a savings account! It’s there for saving, not spending.

Talk to your bank about what options they have for savings accounts, and go with one that is going to grow your funds for you as they sit there.

Positive money mindset

And finally, last but not least, I think a great money habit to form early in life is to have a positive money mindset.

A lot of us have been told all our lives that rich people are greedy, or that money is not important, or that we will never be rich.

These limiting beliefs are only going to hurt your mindset towards money, possibly to the point where you won’t care about making it and saving it. This mindset is incredibly toxic because your thoughts eventually become your actions.

Wanting to be financially stable is not something to be ashamed of. Nor is it impossible.

Here are some great books that will help you develop a positive money mindset:

  • Think and Grow Rich
  • The Richest Man in Babylon
  • You Are a Badass at Making Money

With the way things are set up in today’s world, there are a ton of places that can make you money without you even having to leave your house.

  • Fiverr. Great for freelancers!
  • Dropshipping
  • Online tutoring
  • Affiliate marketing
  • Selling on eBay
  • Creating courses on Skillshare
  • Starting a money-making blog. You can find out how I make passive income on my blog by signing up for my free blogging course below!

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    12 good money habits to start in your twenties- How to master financial planning early on

    finances financial planning money habits

    45 Comments

    About Mariam

    Hi! I'm Mariam, your go-to guide for navigating life’s twists and turns. I write posts to help women create their dream lives. Think of me as a supportive friend cheering you on to become your best self. My goal is to inspire confidence and celebrate your unique journey. Join me as we embrace our strengths and enjoy the adventure of self-discovery together!

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    Comments

    1. The Newbury Girl says

      March 4, 2020 at 8:41 pm

      I’m loving the new website design and the logo!! I completely agree that the twenties are a major financial turning point for so many people – especially in the US. I once saw a stat that the majority of Americans have less than $1K in their savings accounts!!

      It is so important to pay your bills and yourself first (aka saving money) and THEN spend some discretionary funds on whatever you like. Doing this is key to developing a positive relationship with budgeting and spending. Also, I’m glad you mentioned saving within a retirement fund because this is often overlooked until it is too late!

      Reply
      • Mariam says

        March 4, 2020 at 8:43 pm

        Thank you so much!

        I completely agree with everything you said, especially about the retirement fund! That ideally needs to be worked on as soon as possible.

        Reply
    2. ✨Teresa Maria | Outlandish Blog✨ (@TeresamariaThe) says

      March 4, 2020 at 8:42 pm

      Really good advice! Even if committing to all of these things at once isn’t possible, setting oneself a monthly budget and sticking to it helps a long way. That way you ensure your bills and credit card debts get paid, after which it’s easier to start saving for retirement, apartment, etc.

      Teresa Maria | Outlandish Blog

      Reply
      • Mariam says

        March 4, 2020 at 8:47 pm

        Absolutely! I think for most people slow and steady works better anyway as they’re financially unable to do everything at once. Thank you for stopping by!

        Reply
    3. BusinessWomenThrive says

      March 5, 2020 at 2:24 am

      I’m OBSESSED with savings and getting my finances right! Thanks for the tips!

      Reply
      • Mariam says

        March 5, 2020 at 11:01 am

        You’re welcome! Thanks for stopping by!

        Reply
    4. Jenny in Neverland says

      March 5, 2020 at 1:49 pm

      Great tips! It’s so important to get savvy with money when you’re younger so you don’t end up in a sticky situation later in life!

      Reply
      • Mariam says

        March 5, 2020 at 10:17 pm

        Absolutely!

        Reply
    5. Hannah says

      March 5, 2020 at 2:54 pm

      Great tips! I’ve started using Yolt to help em with my finances and it’s really helping – much easier to track everything and see where cuts can be made.

      Reply
      • Mariam says

        March 5, 2020 at 10:19 pm

        I’ll have to check it out!

        Reply
    6. Abbey says

      March 6, 2020 at 12:20 pm

      Recently turned 21 so I’ll be keeping this in mind! 👌🏻

      Reply
      • Mariam says

        March 6, 2020 at 12:38 pm

        That’s great to hear!

        Reply
    7. Rachel says

      March 6, 2020 at 10:26 pm

      Very useful tips! I’m still working on stopping buying on impulse.

      Reply
      • Mariam says

        March 7, 2020 at 7:52 pm

        Story of my life! 😂 It gets better!

        Reply
    8. Zineb says

      March 7, 2020 at 5:40 pm

      To have an emergency fund seems really important, I better start on it too. Thank you for the advice.

      Reply
      • Mariam says

        March 7, 2020 at 7:51 pm

        You will thank yourself for starting it if you ever needed! Thank you so much for reading. 🙂

        Reply
    9. bbbryony says

      March 7, 2020 at 5:58 pm

      These are some fab tips! I’m hoping that I’ll never need a credit card as the thought of them even stressed me out, spending more money than what you have, not a good habit x

      Reply
      • Mariam says

        March 7, 2020 at 7:50 pm

        Sometimes a credit card is needed but it’s definitely a good habit to have to pay it off on time! That’s what I used to struggle with a LOT.

        Reply
    10. Leslie says

      March 7, 2020 at 6:04 pm

      Mariam, this is such a great article with useful and practical tips! Definitely something I could’ve used in my 20’s. I’m sharing this on Twitter.

      Reply
      • Mariam says

        March 7, 2020 at 7:50 pm

        Thank you so much, Leslie!

        Reply
    11. scoringbigonfamily says

      March 7, 2020 at 7:11 pm

      Great tips! Stick with it past your 20s!

      Reply
      • Mariam says

        March 7, 2020 at 7:49 pm

        Oh absolutely!

        Reply
    12. Rachael says

      March 7, 2020 at 7:27 pm

      Such a useful post. I already put money into savings as soon as I’m paid and I have an emergency fund I put a little into each month.

      Reply
      • Mariam says

        March 7, 2020 at 7:49 pm

        Those are such good habits! I love paying myself first haha.

        Reply
    13. thoughtswithsuz says

      March 7, 2020 at 7:45 pm

      I wish I had been smarter in my 20s…thankfully I’m way better now about it! Great tips 👍

      Reply
      • Mariam says

        March 7, 2020 at 7:48 pm

        Me too, but at least we have it under control now! 🙂 Thank you for reading.

        Reply
    14. Courtney Fulton says

      March 7, 2020 at 7:54 pm

      Great tips! The best thing I’ve done is to have the separate savings account. It’s the only thing that stops me from spending!

      Reply
      • Mariam says

        March 7, 2020 at 7:58 pm

        Oh forget saving with just one account, haha! I could never.

        Reply
    15. Sharif Jameel says

      March 7, 2020 at 8:31 pm

      This is a great set of guidelines – my twenties are way behind me but I can assure you I know plenty of 40-year olds who still haven’t figured this out!

      Reply
      • Mariam says

        March 8, 2020 at 10:30 am

        Thank you!

        Reply
    16. Rosie Ireland says

      March 7, 2020 at 9:39 pm

      These tips are so bloody good – getting into these habbits early in your 20s is so important!
      Rosie

      Reply
      • Mariam says

        March 8, 2020 at 10:30 am

        Thanks Rosie!

        Reply
    17. Shirley Ledlie says

      March 8, 2020 at 11:25 am

      Thanks for sharing. This is so important. I was useless and have only just improved in my 50’s! A late starter. Thankfully my kids are good. Great pointers and advise.

      Reply
      • Mariam says

        March 8, 2020 at 2:00 pm

        Better late than never! 😊 Thank you so much for stopping by!

        Reply
    18. Harshit Sagar says

      March 8, 2020 at 2:12 pm

      2 words: Amazing tips.

      Reply
    19. tonyalee says

      March 9, 2020 at 5:54 pm

      Great tips! I wish I would have started in my 20’s with saving and paying off debt. It’s SO hard to climb out of that. 🙂

      tonyalee @ http://vivaciousbibliophile.com

      Reply
      • Mariam says

        March 9, 2020 at 5:58 pm

        It really is! Debt is such a hard thing to get rid of.

        Reply
    20. Rosie Ireland says

      March 29, 2020 at 6:03 pm

      So many of these tips are bloody brilliant. I am already ding many of these but I am going to try to do them all!
      Rosie

      Reply
    21. Bethany Jane says

      March 31, 2020 at 4:27 pm

      I really wish I’d started a lot of these way sooner! I spent most of my 20s absolutely useless when it came to money, and it’s only recently that I’ve started having more of a grip on it. Separate accounts are one of my favourite tricks too, it really helps you stick to a budget. Thank you for this post, it’s so helpful!

      Reply
      • Mariam says

        April 1, 2020 at 6:36 pm

        I was in the same boat! It definitely took me a long time to get my finances in order!

        Reply
    22. netpay says

      October 2, 2020 at 8:06 pm

      Fantastic tips! I messed up my credit once with a credit card, and I’ve finally paid it off! I’m scared to use my credit card again, but I know eventually I will. I think that when I do use my card again, I’ll take your advice and only spend what I already have. I hadn’t considered that before. Thank you for the hope!

      Reply
      • Mariam says

        October 3, 2020 at 9:04 pm

        That must have felt so good to pay it off finally! It sounds like you’re already on the path to better finances. Good luck!

        Reply
    23. Betty says

      September 26, 2021 at 8:17 pm

      Hi Marian,
      I enjoyed your blog, I always try to keep at $1,000.00 in the savings account for a rainy day. If my car brakes down, or I need a new tire. It keeps the stress level down for me and I do not worry as much. Having a budget is the key to success and paying your bills on time.

      Reply
    24. Kathleen Saltmarsh-Voss says

      March 23, 2022 at 3:25 pm

      This is a great list!

      Reply
    25. Rahul Dubey says

      September 17, 2022 at 4:46 am

      Good tips to really find the right way to save your money. I will now follow these steps for creating a positive mindset and also paying the debts first. Thanks for sharing the post!

      Reply
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