Your 20s are full of change as you transition from college to a career and consider starting a family. While taking on adult responsibilities, you should focus on establishing habits that will set your finances up for long-term success. Along with seeking financial advice and identifying goals, the following tips will help cultivate better money management.

Financial Advice for Your 20s

1. Create a Budget

The first step of any financial plan is creating a budget. Track your spending so you have an understanding of where your money goes each month and can see if you need to cut back on spending. After reviewing your income, expenses, and debts, prepare a realistic budget you can follow. This will require living within your means and eliminating unnecessary purchases.

2. Maintain Reliable Credit

Your credit score plays a crucial role in many aspects of your financial life. Thus, you should strive for a high rating as early as possible. This process involves paying your bills on time, limiting high-interest credit card debt, and closely monitoring your credit report for errors. If you notice anything wrong, report it to the credit bureaus immediately.

3. Build an Emergency Fund

A standard piece of financial advice is to build up your savings. Generally, this should be the equivalent of three to six months of income. A job interruption or unexpected expense can arise at any time. If you have emergency funds available, avoid taking out a loan or using credit cards, which will increase your financial burden.

4. Save for Retirement 

Though retirement may be decades away, start saving young. The sooner you begin, the more time compound interest will grow in your account. Take advantage of an employer-sponsored 401(k), especially if they’ll match your contributions. Also, consider investing in an IRA account, which grows as tax-deferred income. 

For more financial advice and guidance, turn to McKinney Group Wealth Management in Bridgeton, MO. They’ll analyze your situation and formulate an actionable plan to accomplish your objectives. With more than 20 years of experience serving the Greater St. Louis area, they’ve been helping clients of all ages maximize their money and secure economic stability. Call their office at (314) 736-1490 to schedule an appointment.