Master Money in Your 20s With These Personal Finance Tips

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Most of us never get a class in personal finance, so our approach to managing money after graduation is largely trial and error. But your 20s are an important time to lay the foundation for future financial stability.

Fortunately, you can learn the basics of personal finance from leading financial experts and bloggers. From tips on budgeting to paying off student loans to saving for retirement, here are eight personal finance tips from the pros to get started.

8 expert personal finance tips

To get started, check out these eight personal finance tips for 20-somethings from certified financial planners and the writers behind leading personal finance blogs.

  1. Pay off your debt ASAP
  2. Build a 3- to 6-month emergency fund
  3. Create a budget and stick to it
  4. Avoid the trap of retail therapy
  5. Start saving for retirement
  6. Don’t be afraid to negotiate your salary
  7. Start a side hustle
  8. Spend less than you make

1. Pay off your debt ASAP

Even though you’re young, you might already have some major debt to deal with in the form of student loans. In 2019, the average graduate left school owing $29,900 in student loan debt.

You might also be dealing with an auto loan or credit card debt, which can be especially tough to pay off because of high interest rates.

Instead of letting debt hang over your head, Marissa Lyda of The Budgeting Wife recommends making debt payoff a priority.

“Pay off your student loans, car loan and credit cards as quickly as possible for a foundation to your financial future,” said Lyda.

If you make extra payments, you can get out of debt ahead of schedule. In some cases, it might also be wise to refinance your student loans if you can get a lower interest rate. Either way, once you’re debt-free, you can shift your focus to other financial priorities.

“When you’re young and in your 20s, you have the power to build some serious wealth for your future,” said Lyda. “But it all starts with being debt-free.”

2. Build a 3- to 6-month emergency fund

Although paying off debt is a priority, it shouldn’t eat up all your spare money. It’s also important to put money into an emergency fund so you’re prepared for any unexpected expenses that come up.

“If you don’t have a strong financial foundation in place, you need to start there,” advised Brad Ruttenberg, a certified financial planner based in Florida. “Among other things, that includes an emergency fund of three to six months of your monthly needs.”

Of course, not everyone’s salary makes it easy to build a multi-month emergency fund. But setting aside even a few hundred dollars could be a big help if your car breaks down or you need to make an emergency room visit.

Stephen Nelson, a certified financial planner based in California, recommends putting your emergency funds into a savings account so you’re not tempted to spend it. In particular, he said online banks are your best bet since their accounts come with higher interest returns.

“This is a phenomenal place to park money you are saving,” said Nelson. “This allows you to think twice before dipping into your savings.”

Plus, you can set up recurring transfers between your checking and savings account so you’re building your emergency fund one week or month at a time.

3. Create a budget and stick to it

According to David Carlson, founder of Young Adult Money, a personal finance blog for young people, the best step you can take in your 20s is to create and follow a budget.

“Set aside time to review your spending each month,” said Carlson. “If you don’t know how much you spend on certain categories like groceries, restaurants or transportation, you will struggle to manage your spending.”

Carlson recommends setting a monthly target amount for each category. Then, track your spending to make sure you don’t go past your limits.

You might use a simple spreadsheet, or you could download an expense-tracking app to do the heavy lifting for you.

4. Avoid the trap of retail therapy

Following a budget sounds easy enough, but sticking to your spending limits is a lot harder, especially when you’re having a bad day.

Zina Kumok of personal finance blog Conscious Coins advised 20-somethings to not “spend their feelings.”

“Anytime I feel sad, lonely or depressed, I somehow end up online shopping,” said Kumok. “Sometimes I’ll order a new top or nail polish color. I usually regret my purchase.”

Instead of charging your credit card, Kumok recommends finding more cost-effective ways to make yourself feel better.

“Take a nice walk, call a friend or find an affordable therapist,” she said.

Although you’re feeling down, the lift you get from retail therapy will be short-lived. And if you’re not careful, it could lead to high-interest credit card debt.

5. Start saving for retirement

Drew Parker, creator of The Complete Retirement Planner, said 20-somethings just starting their career probably aren’t thinking of retirement. But starting when you’re young will pay off in the long run.

“Create a written retirement plan as soon as you start working,” said Parker. “It’s not as much about retirement as it is about controlling your destiny, whatever you want that to be.”

By coming up with a plan, you can set yourself up for financial security. And if you can set aside some money each month into an individual retirement account or 401(k), you will reap the benefits of compound interest over time.

If your employer offers a 401(k) match, try to contribute enough to get the full benefit.

“A financial plan is all about what happens well before retirement so that you won’t have to worry about what will happen during retirement,” said Parker. “You may not be able to predict the future, but you can certainly prepare for it.”

6. Don’t be afraid to negotiate your salary

Although many bloggers shared personal finance tips for saving money, Catherine Agopcan, co-founder of Sisters for Financial Independence, emphasized the importance of making money.

“Don’t be afraid to negotiate [or] ask your employer for a benefit,” said Agopcan.

Learn about effective negotiation strategies before your meeting so you’re prepared when you meet with your manager or human resources. It’ll also help if you do your research on average salaries for comparable positions in your industry.

Besides negotiating your salary, consider alternative employee benefits as a way to boost your earnings, including tuition reimbursement or a gym allowance.

“Small things can add up,” said Agopcan. “It never hurts to get these extras added as part of compensation negotiation at hiring or during bonus time.”

You might have an even better chance if you’re working at a new company.

“Startups and smaller companies are constantly revamping their benefits offerings,” said Agopcan. “Give your feedback so you can take advantage of these alternative financial wins.”

Even if your company doesn’t offer specific benefits yet, it can’t hurt to ask about adding them to your contract.

7. Start a side hustle

Working a side hustle is another way to boost your income.

“Instead of binge-watching the next Netflix show, find a side hustle you can make extra money with,” said Kelan Kline, who co-founded The Savvy Couple with his wife, Brittany. “Make sure it’s something you enjoy because your time should never be traded for money.”

Your side hustle could involve anything from freelance writing to starting an online business to driving for Uber. But as Kline said, try to find something you like so you don’t get burned out trying to balance it with your full-time job.

8. Spend less than you make

No list of financial tips would be complete without the golden rule of personal finance: Spend less than you make.

“While this advice is repeated ad nauseam, it is absolutely the bedrock to building any amount of wealth,” said Nelson.

To make sure your spending doesn’t exceed your earning, Nelson recommends setting up automatic savings.

“Each month, have part of your paycheck directed to your savings account automatically,” he suggested. “This will ensure that [you’re saving and] living below your means.”

And who knows? If you follow all the personal finance tips listed above, you might be able to go into your 30s completely debt-free.

Interested in refinancing student loans?

Here are the top 6 lenders of 2021!
LenderVariable APREligible Degrees 
1.89% – 5.99%1Undergrad
& Graduate

Visit Splash

1.99% – 5.64%2Undergrad
& Graduate

Visit Earnest

1.99% – 6.84%3Undergrad
& Graduate

Visit CommonBond

1.91% – 5.25%4Undergrad
& Graduate

Visit Lendkey

2.25% – 6.53%5Undergrad
& Graduate

Visit SoFi

2.17% – 4.47%6Undergrad
& Graduate

Visit PenFed

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of Feburary 1, 2021.

2 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of October 26, 2020, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 10/26/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 02/17/2021 student loan refinancing rates range from 1.91% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.

5 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: 1. Fixed rates from 2.99% APR to 6.99% APR (with AutoPay). Variable rates from 2.25% APR to 6.53% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.12% plus 2.38% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The discount will not reduce the monthly payment; instead, the interest savings are applied to the principal loan balance, which may help pay the loan down faster. Enrolling in autopay is not required to receive a loan from SoFi. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score.Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

6 Important Disclosures for PenFed.

PenFed Disclosures

Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.99%-5.15% APR and Variable Rates range from 2.17%-4.47% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.