Important Financial Moves That Everyone Should Make in Their 20s

There are a multitude of finance related things that people in their 20s should make a point of doing. When you start practicing fiscal responsibility at a young age, it will benefit you for the remainder of your life in many ways. You don’t want to make the terrible mistake of waiting until your 30s or 40s to start doing these things. It is crucial that you get a head start when it comes to your finances.

Get Yourself a Credit Card

Just about everyone in their 20s should have a credit card. This will help you establish a credit history (hopefully a positive one). If you use your card responsibly, your credit rating will increase over time. This means taking care of your balance in a timely manner on a consistent basis. The last thing you want to do is to carry a balance on your card, because doing so will only lead to big trouble. You’ll want to spend some time looking for the right card to get. There are even prepaid credit cards, which are perfect for beginners.

Make a Budget

If you do not currently have a detailed monthly budget, you’ll need to get into the habit of doing this starting now. Each month you will need to revise your budget so that it includes all of your expenses. While you cannot always anticipate every expense, there are certain things that you know you’ll have to pay for. This includes recurring bills like rent, groceries, internet, car insurance, etc.

Having a budget in place is important for many reasons. It will provide you with useful information when you are thinking about making a big purchase. After all, you don’t want to buy something if you can’t truly afford it.

Apply for a Loan

Every young person should be familiar with the process of getting a loan. This is something else that can do your credit a lot of good if you are responsible. It is essential that you pay back everything you borrow by the predetermined date. You are going to have to pay interest on your loan, so you need to keep that in mind.

The interest rate or APR will vary depending on the lender, your credit, and a few other factors. Just applying for a loan will be a good overall experience for you. Whether you go through a bank or a private lender, this is really something you need to do.


People who are in their 20s should also make some sort of investment. This can be stocks, bond or something else entirely. Just make sure that you are smart when it comes to the investment decisions you make. You need to do your due diligence before investing in anything at all. This means researching the market and other relevant things.

One of the main keys to intelligent investing is diversification. This basically means that you spread around your money by investing in a variety of things. You’ll want to put some of your money into stocks, a little bit into commodities, and so on. This essentially reduces your disk of major losses, which is most definitely important.

Do Your Own Taxes

While it can be tempting to lean on your parents to do your taxes, it is something you should learn early on. These days there are all kinds of software programs that make doing this very easy. You basically just need to enter in the information that it says in each empty field. It might be a bit more complicated if you are self-employed. There is no shame in getting advice, but you should do a majority of this work yourself.

Start Paying Off Your Debt

You absolutely don’t want to wait to start paying off your debt. It is crucial that you get this taken care of as quickly as possible. The longer you let it sit, the worse your credit is going to get. Make sure that you have a detailed strategy formulated for doing this. There are plenty of effective solutions, including consolidation. Getting a debt consolidation loan could help put you on the fast track to paying off everything you owe.

These financial decisions will help you to become a more fiscally responsible adult. While it might not be the most exciting thing ever, it is a crucial part of growing up and maintaining a stable life. Remember to save as much money as possible from each of your paycheques as well. You can put this money towards an emergency fund or even retirement. Both of these things are very important for their own reasons. You don’t want to find yourself cash poor when you really need money. Whether it is in old age or for an emergency expense, saving is crucial.

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