10 Smart Money Moves to Make in Your 20s for a better future

smart money moves to make in your 20s

Okay, let me start by welcoming you to your sweet 20s – exciting!

But before you run off brimming with excitement, I must make it clear to you that the choices you make now will make or mar the rest of your financial life.

No, you’re not too young. Neither are you too inexperienced. It’s not too early to wonder how to be smart with money in your 20s.

As a matter of fact, the earlier you start making smart money choices and laying the foundation for better money management, the better off you’ll be for it. 

One valuable thing you have on your side when you’re in your 20s, is time. And you can choose to use this to your advantage or not.

How best you utilize your time and start making necessary money moves, is what will set you apart from your peers many years from now. 

Another beautiful thing about being in your 20s is that your future is still a blank page and you’re the only one who can write your story.

So as I officially welcome you to your adulting age, I have taken my time to put this write up together for you. If you make these smart money moves in your 20s, you’ll have your future self thanking you for it.

Let’s dive right in.


1. Start Saving for Retirement

One of the best smart money moves to make in your 20s is to start saving for retirement.

Money in purse

It is understandable if the word ‘retirement’ still sounds like a far fetched concept to you now; but trust me, if you start saving for retirement early, you will be able to retire early. Saving now will make life much easier for yourself in future.

So how do you do this?

You can start by getting a 401(k) savings retirement plan with your employer. This will let you save and invest a piece of your paycheck before taxes are taken out. 

Also, there’s the fact that you’ll benefit from compound interest that will accumulate on the 401(k) savings over time.

You may feel that setting aside that small fund now won’t amount to much, but you shouldn’t forget the advantage of compounding returns and the fact that it’ll be helping you develop better financial habits. Plus, you can always increase the amount you put towards retirement after each paycheck when your income improves. 

If your employer doesn’t offer a 401(k), you can opt for an IRA. 

2. Start Working Towards Building a Successful Career

Man on suit

There’s no mincing words with this, your career is one of the most important things to focus on in your 20s. 

Your career defines you, and to a great extent, it determines what your financial life would look like. 

Your 20s is the best time to start positioning yourself for a successful career – the time for great money making moves.

One smart trick to adopt when choosing a successful career, is to follow a work path you love and one which has plenty of growth opportunities both for your personal life and finances.

Whether you choose to go to college or learn a skill in any skill acquisition center, what matters is that you develop highly sought after skills that people will be willing to pay for. This should likely give you leverage out there.

A good career path is one you’ll find yourself happy with in the long haul. If you don’t enjoy what you’re doing currently, then it probably isn’t a good career choice for you.

Explore other fields, try acquiring different skills and try out several opportunities. It is always better to figure out what works for you in the early stages of your life than having to quit your job down the road.

Also, you should consistently seek out ways to increase your worth by making yourself stand out in your chosen career. You can do this by taking up courses that teach more advanced set of skills in your career.

Remember, you are building to set yourself up for more career success and financial stability later in life.

3. Start Your First Side Hustle

Girl using a laptop

Starting a side hustle is one of the best smart money moves to make in your 20s. 

Warren Buffet once said, “If you don’t find a way to make money while you sleep, you will work until you die.”

And, I agree with him.

Having a single source of income is financial suicide. You’ll always be one foot away from poverty. Especially when the security of that job you’re putting much hope in isn’t guaranteed.

The ultimate goal of having a side hustle is to create a passive income that’ll give you an additional cash flow so you won’t have to work so hard in the future.

In most cases, especially when managed properly, your side hustle can quickly become your major source of income and a full time business for you. This will give you proper financial assurance than the fear of losing your job you normally would have been nurturing otherwise.

With the number of technological gadgets we have around today, starting a side hustle couldn’t be more easier.

You probably already own a laptop or a smartphone – that’s all the gadget you’ll need. There are lots of things you can do online to make money: 

  • Starting a blog 
  • Participating in paid surveys 
  • Starting an e-commerce site 
  • Affiliate marketing 
  • Freelancing – Fiverr, Upwork
  • Tutoring over Skype
  • Starting a YouTube channel, etc. 

So, go online now and get started with any of the online skills you’re comfortable with and keep pushing forward. Even if you make mistakes, it’s progress.

4. Start Saving For Emergencies

Medical equipments

Your 20s is a great time to start saving for emergencies. Your emergency savings is your insurance against unexpected expenses.

Saving is not only a good smart money move to make in your 20s; it also gives you the peace of mind in knowing that you’re covered financially when unexpected occurrences – sudden job loss, an illness or a car accident, etc.-happen.

A good emergency savings should be able to cover your expenses for a period of 4 – 6 months till you find your footing once again.

Saving for emergencies will not only reduce your reliance on credit cards and monetary debt, but you will also learn to have a general sense of responsibility and self-reliance early in life. You would not have to go racking up high-interest debt each time you’re faced with little emergencies.

Even if you don’t set much aside for saving, what matters is that you’re developing the good habit of saving, which will help your finances in the long run.

5. Start Paying Off High-Interest Debt

Debt inscription

The fact that you’re starting off your adult life with debt to pay (student loans, credit card debt or maybe you’re financing a car, etc.), doesn’t mean you have to resign yourself to living a life burdened by debt.

Look at debt as money you’ve already spent, but on someone else’s bill and see interest as money you pay for the privilege of borrowing. And together, they are massive strongmen that will cripple your finances in the long run.

Having said that, you must take charge of your finances by paying off your debt as quickly as possible so that more of your income don’t go towards paying interest. You should tackle high-interest debt first before moving on to other ones.

Even if you don’t end up paying off your debt completely, take solace in the fact that you’re on the right track to having a better financial future. By reducing your debt, you can then focus on achieving other financial goals.

6. Start Spending Smart

Woman shopping

A lot of young adults try to live a certain lifestyle even before they can afford it. Your 20s will come with a whole lot of peer pressure, and they’ll want you to start living a certain way and probably lavish money on things you don’t need.

There’s nothing wrong with wanting to have fun or buy fun items, but your finances shouldn’t be sacrificed just so you can feed your fancies. Seek out ways to have fun without spending too much money.

Now is the time to develop essential frugal habits that will stay with you for years to come. Additionally, you must learn to distinguish between what your WANTS are from your NEEDS.

Learn to differentiate between those things that must be paid for and those that merely catches your fancy.

Before you spend any penny, you must always ask yourself if you really need what you’re buying or paying for, that way, you’d be able to fully utilize every dollar spent.

Also, make it a habit to write down whatever it is you spend money on daily. That will help you weed out those things that are eating deep into your finances.

Be a penny pinching millennial. I am not saying you should starve yourself or wear rags just to save money. Simply be mindful of what you buy and why you buy them. Use coupon codes and discount deals to your advantage too.

If you can break through this stage, The other smart money moves to make in your 20s will be as good as easy to handle.

7. Set Achievable Financial Goals

Financial goals are those money objectives you hope to achieve. They can be short term goals like:

  • Saving to buy a car
  • Starting a well paying side hustle
  • Saving for a vacation
  • Paying off debt
  • and more.

You can also have long term goals like:

  • Saving to buy a house
  • Saving for retirement
  • Investing in stocks
  • and more.

Your 20s is the best time to start setting financial goals for yourself. So start now and write down your goals. You don’t have to have it all figured out.

It’s not compulsory you stick with your goals — you’re young, so they may change as you get older. But having an idea of where you want to get to in life will makes it easier for you to make smart financial decisions. 

8. Start Investing

Woman investing in stock

Investing in your 20s will better position you to become a billionaire in future. Okay, I may be painting with a broad brush but I’m sure you get the gist.

If you’re already following my advice on setting up a 401(k) with your employer, then congratulations, you have already made your first bold money making move with investment. You have just gifted yourself all the benefits of compound interest.

You’ll soon realize that those little retirement savings can quickly become a sizeable sum of money.

Investing means getting your money to work for you. I cited a quote earlier from Warren Buffet — the one about how you’d work till infinity if you don’t find a way to make money while you sleep? Yes, that one. Investing is a step in the right direction if you want to make money while you sleep.

However, the most important part of investing is getting started. There are lots of things you can invest in – stocks, bonds, high interest savings, etc. So, get started today.

Investing your funds is a great smart money move to make in your 20s, but ensure you are investing in legitimate opportunities.

9. Surround Yourself With Financially Smart People

10 Smart Money Moves to Make in Your 20s for a better future 1
Connect With People Outside Social Media

There’s a popular saying that you’re a reflection of those you move around with. Your 20s is a good time to carefully handpick your friends, and possibly, a partner, who share same values with you.

If you surround yourself with friends who live way above their means and whose financial mantra is ‘spend first then worry later’, you’d sooner start living like them, and that will hurt your finances.

The popular saying that you’re an average of the 5 people you spend the most time with is true in most cases – especially when it comes to making financial decisions.

You’re more likely to spend money lavishly if you are surrounded with friends who have carefree spending habits.

So, choose your friends wisely and ensure they are those who share your money values and support your financially savvy lifestyle choices.

10. Lastly, Don’t Be Afraid To Fail

Failure inscription

Wanna hear something interesting? The reason most people fail is because they are afraid of failing. Now read that again nice and slowly. You will fail even if you don’t try something new, that’s life’s lesson 101.

What’s my point?

Don’t fear failure. Don’t be afraid to put yourself out there to try new things. Go get that new job, try out that business idea you’ve had with you since Adam. Granted, you will make lots of money mistakes as you start out but don’t let that deter you.

Don’t let your fears stop you from reaching your goals and achieving your dreams. You have plenty of time to your advantage while in your 20s. So even if you mess up, you’ll have time to recover and restrategize.


Forget everything society tells you about what a model grown up should be. Society likes to tell us how to live, standards to maintain and expectations to meet. But trying to meet societal expectations is like chasing the wind, your best efforts will never truly be enough.

Like I mentioned earlier, your life is a clean slate that’s yet to be written on. You hold the key and the means, you can choose to drive yourself to financial glory, or not. 

Above all, the best money move you can ever make is to spend your money on the things that matter to you personally, not on things everyone else thinks you should spend it on.