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The Best Budgeting Tips For Your 20s and 30s

Lindsay Tigar  |  January 11, 2023

From creating a budget to maximizing your retirement, here’s how to set yourself up for success in the first two decades of your career.

We all know the importance of saving, investing and, hopefully, making a plan for retirement. But sometimes just getting started can be one of the biggest challenges. What type of accounts should you create? And what’s more important — saving or paying off student loans? When, exactly, do you start saving for college expenses for your children? It’s a lot to unpack and learn. Luckily, we have answers from financial experts about the top budgeting (and saving) tips for your 20s and 30s. 

Here are the most helpful takeaways:

The Best Budgeting Tips For Your 20s

You may feel like retirement is a million years away at this point. Then you blink and a decade has gone by. That’s why setting yourself up for good saving and spending practices right out of the gate will help ensure you have the most time for your money to grow in the decades ahead.

Create a Budget

The vital first step in becoming financially independent and successful is fairly straightforward: create a budget so your money habits can serve you for a lifetime. After graduating from university, snagging your first job and putting down a deposit on an apartment, you (and your wallet) may already feel exhausted. 

But when that first adult paycheck deposits into your account, it’s time to begin budgeting. “If you learn to keep track of your spending, set intentions for how you want to use your money in the coming months and years, and then stick to that plan, you will feel more financially secure and capable, says Kelley Holland, an author and financial coach for women. “Having a budget — or, as I prefer to call it, a statement of intent — will also help you plan for future goals like buying a home,” she explains. “You can draw up a budget on paper or a spreadsheet or use a digital platform.”

Begin crafting your monthly and yearly budget by paying yourself first. “Subtract from your income an amount that you will put into savings before you allocate money to your current living expenses,” Holland says. “You can make this easy by automatically transferring money from your checking account to a savings account every time you get paid.”

Eliminate or Avoid Debt 

If you left college with a mountain of student loan debt, first of all, take a deep breath. It can feel daunting — because it is — but creating a financial strategy to keep it under control ASAP is vital. It may be helpful to know that many others are in your same shoes, considering 44 million Americans have student loans and the average citizen has $38K in personal debt.

The key here is to be as aggressive as your income allows, urges Julia Pham, a wealth advisor and CFP at Halbert Hargrove. If you’re not sure where to begin, a substantial debt to prioritize are the loans with the highest interest rates, so more of your hard-earned cash goes toward the principal.

“All other things being equal, this will save you money in interest payments over time. Consider automating your payments so you never miss one,” Pham says. “If you are lucky enough to have minimal student debt in your 20s, do your best to avoid taking on any additional debt by creating and living within a budget that works for your lifestyle.”

Sign up for Employer-Sponsored Retirement Benefits

When you’re in your 20s, you will likely get your very first job offer. Congrats — go you! In addition to a great work/life balance culture and a good starting salary, give a long, hard analysis into the employer-sponsored retirement benefits, recommends Kendall Clayborne, a certified financial planner at SoFi.  

“If your employer offers a match on your 401(k), you should treat it as free money and leverage this benefit as much as is feasible for your financial circumstances,” she says. This means if they max up to six percent, you should do everything you can to maximize your contributions. This may mean subscribing to an online gym membership vs. an in-person one, but your 40-something self will appreciate your sacrifice. 

Create and Contribute to a Roth IRA 

Another retirement savings approach is a Roth IRA. You can think of it as a way to stow away money that earns interest vs. a traditional savings account that barely returns anything. As licensed, certified public accountant and CFO of Petit Mort magazine, Mia Lee explains that even the highest-yield savings account rarely outperforms inflation, so you’re better off with the Roth IRA since you’re in your prime compounding years. 

“It can be challenging as a young professional with limited earnings to prioritize savings,” Lee continues. “However, remember that every dollar you save in your early years will grow significantly more than dollars saved later in life.”

In particular, Lee says to put as much money as possible up to the annual limit of $6,000 into a Roth IRA. “Roth IRAs grow tax-free for the rest of your life before retirement. This means that if you put $6,000 in at 23, which grows to $20,000 when you retire at 60, you don’t owe a single penny of taxes on the $14,000 earnings.”

Create a Rainy-Day Fund 

Your 20s require a lot of careful financial crafting: paying off debt, getting started with retirement, and, you know, everyday living expenses. It’s a lot, but you still shouldn’t skip creating an emergency fund. “Put aside a portion of your paycheck in a savings or money market account as a rainy-day fund until you accumulate six to nine months’ worth of expenses,” says Faron Daugs, a certified financial planner, wealth advisor and the founder and CEO of Harrison Wallace Financial Group. “This money can be used for emergencies and/or opportunities that you couldn’t anticipate or prepare for in advance.” 

The Best Budgeting Tips for Your 30s

Once you reach this pivotal decade, you’ve likely been working your way up in your industry for six to eight years. You may be going from a ‘junior’ to ‘senior’ title, making more money, and starting to think critically about buying a home, family planning and inching closer to retirement. Like your 20s, it’s a busy decade, but differently: you already have some foundation, but now, you want to build on it. 

Plan for Lifestyle Changes in the Next 10 Years 

First, accept that your 30s will likely be a time of drastic change. If you want to get married and you’re not yet, statistically speaking, you’re likely to say ‘I do’ in these years.  And your career? In the next few laps around the sun, you can easily reach a C-level position, leave your job, start your own business, and much more. 

All these transitions are exciting, but they do require some planning, Lee reminds. “Evaluate your current expenses and projected lifestyle changes for the next ten years, then budget your earnings, spending and savings accordingly,” she explains. “By now, you likely know your earnings trajectory for the next decade, whether you have or want to start a family with children, and whether you want to stay in your current career or make a change.”

Lee says ideally, you should have the following:

  • At least one year of your current gross pretax earnings in savings, including investments.
  • Six months of cash or liquid assets expenses, such as stocks and bonds.
  • Actively saving at least 20% of your take-home earnings after taxes. 

“If this is not the case, either cut costs or evaluate ways to make more money, whether that be a career pivot or a side hustle,” Lee continues. “Retirement may seem far off, but it will come up on you quickly.”

Maximize Income and Retirement Contributions

After over a decade of being in the workforce, you have developed skills that can have a higher income, says Diana Yáñez, CFP, RLP. “Budgeting is not all about what you spend, but also about what’s coming in,” she continues. So, if your current employer isn’t willing to pay you what you’re worth, it’s time to start looking for greener opportunities at another company.  

Your 30s are also a time when you should continue to maximize retirement contributions, Pham says. “If your workplace offers a 401(k) account, take advantage. If they offer a company match, even better,” she continues. “Save at least what they are willing to match and target an overall savings of 15 to 20 percent of your gross paycheck.”

Resist the Urge to Upgrade 

You know the saying, ‘Keeping Up With the Joneses’? Even if you don’t have a wealthy family next door with the last name Jones, lifestyle creep is a real thing and can be detrimental to your financial safety net.

Clayborne says as you receive promotions, raises, or bonuses… try to save the majority of them. “It can be tempting to get a bigger house or a newer car, but saving this money serves two purposes: it prevents lifestyle inflation and keeps your expenses lower,” she continues. “This means you will need less money to replace your current lifestyle in retirement, and it allows you to save more money which can be invested and grow over time.”

Start Saving for College for Your Children 

Most adults begin having children in their late 20s and early 30s. Though it may feel a little premature to think about college when they haven’t taken their first steps, the earlier you begin, the longer you give your money to work for you, Daugs says. 

“Many types of plans can offer tax benefits such as tax-free growth. If you are saving for a child’s future education needs, review the benefits of custodial plans, 529 plans, and prepaid tuition plans,” he says. “It does not take a lot to get started if you start early, as the power of compounding returns will be more beneficial to you if you have more time.”

For those with school-aged kiddos, it’s never too early to start talking to them about financial matters. As Clayborne explains, it’s a pivotal time since our attitudes about money are formed in childhood. “This can be in age-appropriate stages such as teaching delayed gratification or the importance of saving for younger kids versus teaching how to use a credit card responsibly for college students,” she adds.

Schedule Financial Check-ins 

In the first five years of your 30s, you may meet someone, fall in love, get married, buy a house and have a baby. A lot happens quickly, and as things change, your money priorities do too. That’s why Monique White, a financial coach and head of community at Self Financial, recommends setting up monthly or quarterly check-ins. You can do this alone or with your partner, if you have shared finances. 

During this time, determine if you’re overspending, not contributing enough to savings or perhaps, too much. “This could be an increase or decrease in income, a new expense, paid off debt, or something that you need to save for in the future,” she continues. “The goal is to know where your money is going and to see what progress is being made.” 


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