Let’s face it—managing money in your 20s and 30s is no easy feat and we don't get taught about it in school. Between student loans, credit card debt, rent, and the pressure to save for future goals like buying a home or starting a family, it can feel overwhelming. Whether you're just starting your career or leveling up, the key is mastering the basics while taking advantage of opportunities unique to our generation. Here’s how you can start winning with money now.
1. Set Financial Goals That Speak to You
A big part of financial success comes from setting goals that genuinely excite you. Whether it’s saving for a fun trip, starting your own business, or becoming debt-free, knowing your “why” makes budgeting and saving feel less like a chore and more like a tool to live the life you want. At the end of the day, that's what financial planning is all about.
Use the SMART goal framework to ensure your financial goals are Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of saying, “I want to save more money,” say, “I will save $20,000 for a home down payment by the end of next year.”
2. The Magic of Compound Interest: Start Investing Early
You have one big advantage- time! Compound interest, which is essentially interest on interest, rewards those who invest early. Even if you can only put away a small amount now, it will grow exponentially over the years. The earlier you start, the more your money works for you.
Start with something as simple as your company’s 401(k) match, a Roth IRA, or consider working with an advisor that specializes in working with people in your situation.
3. Tackle Debt Strategically
Student loans, car payments, and credit card debt can feel like chains holding you back. But with the right strategy, you can pay off your debt faster than you think. Prioritize high-interest debt first, while making minimum payments on the rest. Once that’s gone, snowball those payments to your next loan/debt.
Apps like Undebt.it help you create a debt repayment plan and keep track of progress, making it easier to see light at the end of the tunnel. Regardless of your situation, create a plan and stick to it, your debt situation isn't going to solve itself.
4. Build an Emergency Fund for the Unexpected
When we're young, we tend to feel a bit like superman. The reality is, life happens, and it often happens when you least expect it. From medical emergencies to car repairs, having an emergency fund ensures you don’t end up in debt when surprises come up. Aim to save at least 3 to 6 months' worth of living expenses in a separate, easily accessible savings account.
Set up automatic transfers to a high-yield savings account. Treat your emergency fund like a non-negotiable monthly bill! Most high yield savings account are currently paying 5% so make sure you take advantage of the high rates while you still can.
5. Think Long-Term: Retirement Isn't Just for Boomers
I know it seems far away, but now is the best time to start thinking about financial independence. Even if you're juggling multiple financial priorities, contributing to retirement accounts like a 401(k) or IRA now will set you up for financial freedom later. Compound interest is your best friend in your 20's and 30's.
If your employer offers a 401(k) match, it usually makes sense to contribute enough to get the full match- it’s essentially free money! If you're self-employed or freelancing, explore opening a Roth IRA and/or Solo 401(k). Consult with a financial professional to see what options are best for you.
7. Negotiate Like a Pro
Here’s something they don’t teach in school: almost everything is negotiable, especially when it comes to your salary. Millennials tend to shy away from asking for more, but doing so can make a huge difference in your long-term financial success. Even if you think your employer won’t budge, it doesn't hurt to ask.
Before any salary negotiation, research your industry’s pay standards using websites like Glassdoor or PayScale. When you ask for that raise, focus on your accomplishments and the value you bring to the company.
9. Embrace Financial Education: Knowledge Is Power
There’s no magic formula for instant wealth. Financial success is about continuous learning and smart decision-making. It's on you to make it happen. The good news is, with so much information at your fingertips, there’s no excuse not to get educated on personal finance topics that matter to you, like investing, taxes, or credit building. In addition, there are now financial planning firms that specialize in working with millennials just like yourself, that's exactly why WealthBound exists
Disclaimer: None of this should be seen as advice. This is all for informational purposes. Consult your legal, tax, and financial team before making any changes to your financial plan.