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Just for the record, your 20s is not a throwaway decade. While it is expected that you will make tons of mistakes when it comes to your finances, it is not expected that you will habitually make money mistakes all willy-nilly for a full ten years. So in order to get your financial priorities in check, I’ve come up with five things to make sure you spend your coins on before you hit the big 3-0.

Make sure you check the following things off your financial bucket list:

1. Create an emergency fund.

Your emergency fund should be at least six months of your total expenses and be kept liquid and safe from fluctuation in a savings account or money market. This financial cushion gives you peace of mind in the event of a layoff, a car repair, or an injury.

2. Ditch all of your friends trying to keep up with the Joneses and the Kardashians because they will keep you broke way into your 30s.

The Social Mirror Theory states that people are not capable of anchoring their self-concept and self-perception without taking into account others’ viewpoints. Even though this theory speaks to general social interactions, we know that this is applicable to how we spend money. If your friends are spending like crazy throughout their 20s, then you are more likely to pull out your wallet once your crossover into being a big girl in your 30s.

3. Pay down your debt systematically.

Use your 20s to create healthy financial habits when it comes to paying off debt. The two most popular strategies for tackling debt are the “high-interest” approach and the “smallest balance” approach. With the former, you pay your bills with the highest interest rate first.

The rationale behind this strategy is to get the most financially draining bill out of the way first. With the latter, you pay your bills with the smallest balance first of its psychological impact. There is an immediate sense of accomplishment and progress when one bill is completely accounted for.

One method is no better than the other; as you get older, your preferences may change, so stay open to using both approaches.

4. Start saving for retirement.

There is a saying, “old fools were once young fools.” There is no better way to use your youth to your advantage than to start stashing away some funds for your post-work years. Compound interest is on your side. Speak to your human resources professional, accountant, or financial advisor for some guidance on your options and to help you calculate how much you will need to retire.

5. Manage your credit.

You will not be living the young, broke, and fabulous life forever. There will definitely come a time when you mill want to buy a home, car, or start a business. For each of these, you will need to leverage your credit score to apply for loans. So, while you are in your 20s, get into the habit of paying your bills on time, refraining from overextending your credit, and opening unnecessary accounts.

6. Splurge on a meaningful experience.

Money is not only meant to be saved, it is meant to be enjoyed. Make sure that you identify something that you love to do, and then do it without guilt. The memories that you create will be well worth the money spent.


Connect with Kara @frugalfeminista. Learn more about The Frugal Feminista at


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