5 Critical Financial Goals for 20-Somethings (Hint: One Goal Makes You ‘Poorer’)

This guest post comes from my good friend Bob Lotich of ChristianPF.com, a personal finance blog with a mission to help you make, save, grow, and give money.

I remember when I was 20 years old. I wasn’t financially savvy and ended up maxing out a credit card along with incurring other debts. It was a stressful time, and I knew something had to change.

Several years later my wife and I paid off over $30,000 in consumer debts. I had realized that I didn’t have to live in debt, live in frustration, or be doomed to a lifetime of payments. Here are some of the most important financial goals for those of you in your 20s – focus on them now and you’ll be thankful you did so in your later years.

1. Make giving a priority

Giving changes how we view money. It’s easy to get caught up in the idea of building wealth – hoarding it for yourself. Giving can transform your attitude and help you remember that money isn’t everything. Giving is also a lot of fun, so be on the lookout for opportunities to bless others. And when you give, give with a cheerful heart.

Rob: My daughter called me from college yesterday to discussing a donation she wanted to make to a charity. I was so proud! Before she gave, however, we checked out the organization on a website called Charity Navigator. The site rates charities and shows you how much of your contribution actually goes to those the charity seeks to benefit.

2. Develop your career skills

Be a lifelong learner. You’re going to need to develop your skills throughout your lifetime, especially in today’s workplace. Times are changing, and you have to be flexible enough to change with them. Even if you have a secure job, think about some hobbies or trades you can do on the side. Working a side job or two will give you the experience you need to switch to a new full-time position if needed.

3. Eliminate your credit card debt

While there are some enticing credit card rewards programs out there, I always suggest that readers “know themselves” and avoid credit cards if they are prone to carrying a balance.

You can pay off your credit cards using free tools at ReadyForZero.com. Paying off our debts has given us a lot of peace, and if you can be debt-free in your 20s, by all means do so.

4. Build an emergency fund

If there’s anything you can expect, it’s that emergencies will occur. While you might not have experienced too many of them yet, believe me, they’re coming. Many financial professionals recommend having 3-6 months worth of expenses in an emergency fund. That should be enough to cover you in the event of a job loss, a large medical bill, or another emergency.

By putting your emergency fund into a high-yield savings or money market account, you can have quick access to your funds while earning a higher interest rate than your average checking account. After you use your some of your emergency funds, make it your goal to replace the funds you spent as quickly as possible.

5. Start investing for retirement

We’ve all seen the power of compounding at work. Time is a powerful variable in the compounding equation, and because you’re in your 20s, time is on your side. If your company offers a 401(k), start investing there – you might get a match on your contributions. You should also consider starting a Roth IRA.

Many experts suggest putting 10-15% of your gross income into retirement savings. If you’re still living with your parents, you might even be able to put more than this into your accounts, but 15% is a good goal.

All of these goals are more like ongoing practices – ones that you’ll want to adopt and hang onto throughout your life. By solidifying these habits when you’re young, you’re setting the stage for financial freedom as you grow older.

What financial goals are you working toward in your 20s?

Bob is a full-time blogger who writes almost exclusively about personal finance. You can find more from him at Christian Personal Finance.

Published or Updated: September 5, 2013
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.


  1. Steve Will says:

    Great info I am in my 20s and I plan on taking advantage of your tips to plan for my future.

  2. Great post – i hope lots of young people get to read it.
    Its so difficult for young people to start their financial lives on the right footing – as theyre up against a whole marketing industry telling you to buy buy buy

  3. These are all awesome points. I think #5 is the most often overlooked tip, but it could save people years of work when they get older if they start young.

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