Managing Money in Your 20s and Beyond! 55 Tips

Save money in your 20s

So you’ve graduated, got your first job, and moved into your own place. For the first time, you’re on your own for paying the bills, saving money for the future, and keeping your finances in order. At first, things can be overwhelming. But you don’t have to be an expert on finances to make sense of it all. We’re here to help with actionable tips and tricks you can use today.


The Basics

1. Avoid Comparing Your Situation With Others. In the age of social media, when everybody’s posting pictures of the best parts of their lives, it’s easy to envy your peers. That guy you went to high school with just spent a month jetsetting across the globe. Your next door neighbor bought a brand new luxury vehicle. A friend posts pictures of the amazing new house she just bought. Just because they seem to have it all, doesn’t make it true. They may be drowning in debt to pay for that dream vacation, luxury car, or big house. Focus on the things that matter to you, and spend according to what you can afford, not what your friends are doing. Your future self will thank you.


2. Put Together a File of Key Financial and Identifying Documents. You’re an adult now. It’s time to get it together. We mean literally. Make sure you have an original or certified copy of your birth certificate, social security card, passport, and other official identifying documents. File away copies of your lease, rental agreements, and any other important documents you’ve signed. Put together a list of important account numbers and passwords. Store it all somewhere safe like a deposit box at your bank. If you’re ever incapacitated, you will need to know these details, so make sure at least one other (responsible) person has access.


3. Resolve Now to Avoid the Bank of Mom and Dad. It may be tempting to fall back into old habits and have your parents bail you out if you run into a tight spot. But doing this will keep you from ever being truly responsible for yourself. The best way to learn to stand on your own two feet is to accept and deal with the consequences of any bad decisions you might make. Resolve now, before you need cash, not to ask relatives for it. Instead, make a plan for how you will deal with financial difficulties on your own. Be sure you’ve got an emergency fund in place, and when bad things happen (and they will), you’ll be ready to face them head on.


4. Make Sure You’re Fully Insured. When you’re young, it’s easy to feel invincible. You might think you don’t need health insurance, since you figure you’re in good health and you almost never get sick. Or that you only need the minimum “no fault” car insurance coverage, since you’re a good driver. You might think you don’t need renter’s insurance, or disability, or other types of insurance. All it takes is one bad day for that to change, and then, it’s too late. If your neighbor leaves a candle burning and starts a fire that spreads to your apartment, if you get hit by a car and can’t go to work for a while, or if you are handed a costly diagnosis you weren’t expecting, your entire financial house of cards could come crashing down. Shop around and get multiple quotes, but don’t forego insurance to save a buck or two. Be smart, prepared and fully insured.



5. Do a Cash Diet. A good way to get started with a budget is to do a cash diet. This means for your daily expenses, you use only cash. Take out a certain amount at the start of each week, and spend no more than that until the following week. For some, it might be helpful to divide it into a daily allowance. This doesn’t have to be a long term practice (though it can be!), but it should last at least thirty days. By spending only cash, you can keep better track of where your money is actually going and how much of it you’re using. It also gives your bank account some time to settle with minimal transactions coming through it.


6. You Need an Emergency Fund. Saving for a rainy day just makes sense. This is the first, and most crucial, step toward true financial independence. Start out with $1,000, but aim to eventually have about six months worth of living expenses stashed away. And then leave it alone until and unless you have an actual emergency. Buying holiday gifts, going on an amazing vacation, or a big sale on your favorite designer’s new line don’t count. If your car breaks down, you lose your job, or you’re hit by some other unforeseen disaster, you’ll be glad that money is there.


7. Use Apps and Other Tools to Help You Track, Plan, and Manage Your Finances. There are a wealth of easy-to-use apps on the market that can help you get a grip on every aspect of your financial picture. Try out a few until you find options that work for you. Ideally, you’re looking for an app (or several) that will help you see the big picture of where your money is going, and how to tweak spending to reach your goals. Be sure to check out our free Simple Savings Estimator and Compound Interest Calculator to see how your savings will stack up over time.


8. Get Familiar With the 50-30-20 Rule. A general rule of thumb is that your basic needs (necessary food, housing, bills, etc.) should account for about 50% of your after tax Wants should fit in about 30%. This includes both short term like going out to eat or tickets to your favorite sporting event, and long term like saving up for vacation trips or those designer pumps you’ve been drooling over. The remaining 20% should go to savings, investments, and paying off debts. It’s important to be really strict about what constitutes a want or a need. You need to eat, but you don’t need to eat filet mignon. And you need clothing, but you don’t need designer labels. You need to be able to get to work, but you don’t need a high-priced luxury SUV with vanity plates and an upgraded sound system.


9. Consider a Zero-Based Budget. This is a good practice for fine tuning your budget and finding ways to save more and spend less. In a zero-based budget, every dollar that comes in is assigned a purpose, until there is zero left unaccounted for. This doesn’t mean you spend every dollar. A good portion should be allocated to savings and investments (remember that 20%?). But if you know exactly where every dollar is supposed to go, you can make more informed decisions about just what you allow yourself to splurge on and what you cut out of your budget for now, or maybe even for good. Being mindful of where your money is going can help you to live better and feel more secure.


10. Include a Budget Item for Random Fun. Some may look at budgeting and think it’s a huge killjoy, but it doesn’t have to be. If you allocate money for fun, you can be sure you’re using it on activities, items, and experiences that are truly valuable to you. Remember, you work hard. You need to unwind sometimes too. If you put it in the budget, you don’t have to feel bad about spending on entertainment. This shouldn’t be allocated to a specific item ahead of time. It should be “mad money” so that when something fun pops up that you want to do, you have the funds available to spend. It should also be a reasonable amount.



11. Use Coupons. Of course, you knew we were going to say that, right? Couponing doesn’t mean you have to sit down at the kitchen table with the Sunday paper and a pair of scissors, though that’s surely one way to do it. Find a routine that works for you. You can print coupons online, or load them to your favorite store’s digital savings card. Or you can save after the fact with programs like SavingStar, which offers digital rebates for the products you buy. Pick a couponing routine that works for you and watch the savings add up.


12. Save at the Grocery Store Without Coupons. Of course, even with the wealth of options out there, for some people using coupons just doesn’t click. That’s okay too! Check out these easy ways to save money on groceries and slash your food budget.


13. Eat More Veggies and Less Meat. We’re not suggesting anything as drastic as becoming a vegan (though more power to you if you do). But the price per volume of meat is generally drastically higher than that of fruits, vegetables, and starches. Go green one meal a week, or reduce your portion size on meat while adding a salad or other greens to your menu, and you’ll see the difference in your budget as well as your waistline.


14. Try Meal Planning. Just like budgeting allows you to plan ahead and take control, meal planning can be a powerful tool for keeping your food expenses in check. Every week, start by surveying your fridge, freezer, pantry, and cabinets to see what foods you already have that need to be used. Then, put together a meal plan for the week. List out seven breakfasts, lunches, and dinners.

If your budget allows, some of these can be takeout, but remember that’s a want, not a need. From your meal plan, make a grocery list and then stick to it when shopping. When it comes time to make dinner, you won’t have to make a last minute trip to the store, or waste time trying to figure out what to eat because it will all be planned and ready to go. You’ll save a bundle by packing lunch instead of hitting a drive thru. And you’ll save more by not eating out for dinner just because you’re too tired at the end of the day to try to come up with dinner ideas.


15. DIY Your Favorite Foods. Some prepared foods are simply too time consuming or difficult to do yourself, unless you’re the Martha Stewart type with tons of time on your hands. For other foods, you can save quite a bit off your food budget by making them at home. We’ve all heard the old line about skipping the daily cup of overpriced coffee in favor of home brewing, but there are lots of other instances where a little know how goes a long way. Pre-chopped veggies and fruits, pre-mixed salads, and deli made sandwiches are good examples of foods you can easily DIY. Besides, homemade foods are typically better for you and tastier too.



16. Entertain at Home. Going out all the time is a huge expense, and one that it’s easy to lose track of. Instead, try hosting a game night, have friends over to watch the game or a favorite tv show, or enjoy dinner together at your place. If you have friends who are also budget conscious, you can rotate hosting duties among the group. Either way, you’ll still get to spend some quality time with your besties, and save big on that entertainment budget at the same time!


17. Consider Cutting the Cable. Now more than ever, our lives are filled with a multitude of entertainment options. When you were a kid, having cable television was practically a necessity, in the same way having a smartphone is today. Yes, there were a few people who didn’t have it, but they were by far the minority. Many people today have found that with the number and quality of streaming options out there, and the high price of even the least expensive television packages, cutting that bill altogether just makes sense.

Multiply your monthly cable bill by 12 and then decide if it’s worth that much per year to keep it. For some it may be, but for most, it’s an easy luxury to do without.


18. Dump Unnecessary/Unused Subscriptions. Subscriptions can be tricky. Sometimes they can save us a lot of money. If you’re saving money on necessities like razor blades, dog food, coffee, or diapers by subscribing to a monthly shipment, that’s probably a good subscription to keep. If, on the other hand, you’re subscribing to something you barely even use and wouldn’t miss if it were gone, cut it from your budget and use that money for something you’ll actually appreciate.



19. Negotiate Your Bills. Did you know you can likely shave a bit off your monthly bills just by calling and asking? Many people have saved on television or internet service, medical bills, credit card interest rates, car insurance, and even rent, just by making a few phone calls. And if simply asking doesn’t work, you might try using negotiation tactics like the silent treatment to see if you can score a better deal.


20. Pay On-time, Every Time. Late fees are a common waste of money. With just a little bit of organization (or an automatic payment plan), you can save that money for something you actually want. Also, some bills may go up permanently after your first late payment because your interest rate may go up. Finally, about 35% of your credit score is based on payment history. Showing you’re responsible and always pay on time can help you to qualify for lower rates down the line on bills you don’t even have yet.


21. Practice Conservation to Save on Energy and Water Bills. Saving money on the electric bill or water bill is usually pretty simple. It just requires you be aware of your consumption and cut back in ways that won’t negatively affect your lifestyle. Going green can save you some green. Turn off the water while you brush your teeth. Turn off lights when you exit a room. Take shorter showers. Throw on a sweater rather than adjusting the thermostat. It’s good for your budget and good for the environment too. Check out Bankrate’s article on how to save money on your utility bills for more tips.


Other Expenses

22. Buy Quality. This one may fly in the face of your current thinking, but in many instances it’s vital to purchase higher quality items, even if they cost significantly more. Otherwise, you may have to spend more for repairs or replacements. This is especially true for items you plan to keep a long time, like a mattress, as well as items that are part of your personal brand, like an interview suit. Be careful to know what purchases you should get top quality for, and what you’re unlikely to use often enough to matter.

In your wardrobe, classic staples that you’ll wear for years should be high quality. Trendy items should be bought cheap as they’ll likely be tossed aside next season. This will vary based on your personal situation too. If you live in a warm climate, there’s no sense in investing a large amount into a winter coat when you’re unlikely to wear it more than a couple of times a year. If, on the other hand, you live in an area where the winters are long and cold, this is certainly a worthy investment.


23.  Buy Used. For some things, brand new is the only way to go, but for others buying new is wasteful. Cars are a great example. Your brand new vehicle loses about 20% of its value the first time you drive it off the lot, and another 10% in the first year. That’s a huge expense! Additionally, insurance, registration fees, and taxes are all likely to be much higher in a new car than a gently-used model. Instead, consider purchasing a certified, pre-owned vehicle with a good warranty policy. A car that’s a year or two old can be a great investment with a much more affordable price tag.


24. Shop Sales/Clearance Wisely. Sometimes used just won’t do. For those purchases, it’s often a good idea to shop sales and clearance racks. Often you can find the same exact item, in brand new condition, for a much better price, just by shopping around a bit. If you’re planning a large purchase, you might want to check out our article on the best time of year to buy. It would be a real shame to hand over your hard-earned money for a new appliance only to find out it’s half price the following month. With that in mind, sales and clearance are not a reason to spend money you haven’t budgeted for. If you save a lot of money on something you don’t need, you’re not actually doing yourself any favors.


25. Travel in the Off Season. Peak travel seasons are always the most expensive time to vacation. 20-somethings often have the freedom to travel on their own schedule since they typically don’t have kids in school yet. Avoid busy travel times like Spring Break and Summer Holidays, and instead travel when things are quieter. By moving your trip forward or backward a few weeks, you could save hundreds on transportation, accommodations, and attractions too. (And don’t forget to check out our best deals for travel when you’re planning your trip!)



26. Shop Around for a Better Bank Account. With the sheer number of financial institutions available, there are plenty of options out there to choose from. It’s a good idea to shop around for better APY on savings, lower fees, or more free perks. In addition to local banks, be sure to check into the internet-only options that are available. If you, like me, don’t generally need to actually access a physical bank location, you can often get better rates this way.


27. Look Into a Money Market Account. Once you get your savings plan in place and you’re socking away money, spend a little time looking into other account options to replace your standard savings. A money market account will require a minimum deposit, but in return you’ll get a higher interest rate. For long term investments especially, it makes sense to invest in a higher yield account as soon as you possibly can.


28. Look for a Cash Back Card. Almost no one uses only cash these days. Even if you typically pay for your daily expenses in cash, you probably have a credit or debit card for bigger purchases, travel, and other atypical spending. If you can earn cash back on that spending, even if it’s only 1%, that’s like free money in your pocket.



29. Avoid credit card debt. We’ve all heard the horror stories of maxed out credit cards and overwhelming debt, and you’ve likely thought “that will never happen to me.” But it’s easier to get in over your head than you might think. Pay off your cards every month to avoid carrying a balance, and paying interest on it. If you can’t pay off the bill this month, that “bargain” you scored at a hot sale could end up costing you more than it would have at full price!


30. Pay Off Debts. Your financial goals are much easier to reach if you don’t have to worry about a ton of debt hanging over your head. Just by making a few extra payments per year, you can often pay down debts much faster. Imagine the freedom of not having to pay a car loan or credit card payment each month!


31. Refinance Debts. Much like negotiating your bills, you can often save on interest by refinancing your debts. Take advantage of introductory rates when you can. If your credit score has improved significantly since you took out a loan, you might be able to score a better rate just by calling and asking your bank. If not, try other banks to see if they would like to have your business in return for a more attractive APR.


32. Keep it Slow and Steady on Student Loans. One of the biggest financial challenges facing millennials is the burden of student loans. The good news is that because of their typically low interest rates, unlike credit cards or car payments, it doesn’t make as much of a difference whether you pay extra each month or just pay the minimum. Our suggestion is to just pay the minimum on these until you’re rid of other debts. Then, in order to get out from under the burden of debt, go ahead and throw as much as you can at it and be done.


Save & Invest

33. No, You’re Not Too Young to Invest. Saving money for retirement may be the last thing on your mind come payday, but it shouldn’t be. This is actually the best time to get started with investments. Between the amazing power of compounded interest and the number of years you have ahead to build those accounts, you can get a great start on retirement investments.


34. Take Advantage of the Saver’s Credit. In an effort to inspire more Americans to save money rather than spend it, the IRS has instituted a saver’s credit for low or middle income taxpayers. If you meet their income standards, you can get a sizeable tax break for your financial responsibility. Check out the link above or go to the IRS page directly to learn more about how to qualify for and claim this bonus.


35. Create Different Accounts for Different Goals. While it might seem simpler to just have one savings account and throw everything in there, your savings plan will actually benefit from using several different types of accounts for different goals. Long term retirement savings should go in a tax deferred account like a 401(k) or IRA. Other long term goals (wedding? house?) should go in a high yield account like a Money Market. Shorter term goals like vacation or holiday funds can be kept in their own standard savings accounts.

If everything is kept separate it’s easy to see where you stand on each goal at any given moment. And you’re less likely to go over budget on that trip to Europe and draw down your house savings if the funds are kept in separate accounts.


36. It’s Okay to Start Small. If you haven’t ever developed the habit of saving money it may seem like a daunting task. The most important things is to start now. Even if you only put away $10 at a time, the money will add up. As you watch your savings grow, it will likely inspire you to save more. There are lots of small savings plans out there to get you started, so pick one that seems doable, and build from there.


37. Take Advantage of Pre-tax Retirement Accounts. As mentioned above, it’s not too early to start building your retirement savings. Make sure to take advantage of a pre-tax retirement plan if you can. And if your employer matches funds in your retirement account, max that out if at all possible. Otherwise, it’s like leaving money on the table!


38. Take Advantage of Compound Interest. It’s commonly said that Albert Einstein once called compound interest “the most powerful force in the universe.” Whether he did or not remains a question, but the sentiment is certainly understandable. Anyone who has ever spend years paying on a mortgage only to find that their money is mostly going toward interest understands the power compound interest holds.

Make that power work for you by starting your savings early. The sooner you start, the more time compounding has to work its magic. Take a few moments to play around with our Compound Interest Calculator, marvel at the numbers, then go put some money in a high APY account.


39. Monitor and Rebalance Your Investments Regularly. It’s tempting (and common) to stash long term investments in some fund or another and then forget about them. But this can be detrimental to your savings plan. If your fund administrator doesn’t already do so automatically, take the time to monitor and rebalance your investments to keep things moving in the right direction. A good financial planner can help you decide how to do so.


40. Save for a Wedding/House/Children. If you’re just getting out on your own with no plans to settle down anytime soon, marriage, real estate, and kids may be the farthest thing from your mind. But chances are, at some point in your life, you may find yourself wanting one or all of these things. Start planning for them now. Worst case scenario: if you never use the money for what you originally intended, you’ll be able to put it toward something equally deserving.


41. Put Down More Than the Minimum on Your First Home. This one is crucial. If you’re looking into buying a home, don’t be suckered in by those loans that require very little down. In order to keep from being strapped with mortgage payments you won’t be able to keep up with, it’s best to put down a sizable chunk of the purchase price up front. 20% of the home’s purchase price is a good base line, but remember that the more you put down, the less you’ll pay in interest over the length of the loan.



42. Develop Marketable Skills. Your first job is unlikely to be a dream come true, no matter what Hollywood has to say about it. Most likely you’ll find yourself working harder than you thought, for less money than you’d like. But the experience you gain is invaluable. Spend this time, early in your career, building up a set of marketable skills that you can then turn into greater opportunities down the line. The more you learn, the more you will be worth to your next employer.


43. Keep Evidence of a Job Well Done. Every young professional should have a brag file. Every time you earn a kudos from your boss, every time you seal a deal that is a win for the company, every time you go above and beyond in your day to day duties, put a note in the file. Review your brag file before annual reviews or before interviewing for a new position. You’ll be fully prepared when you’re asked about your professional accomplishments.


44. Build Your Professional Network. When you’re out of work and looking for a job, it’s not the best time to try to build your professional network. And yet, without one, finding a good job is increasingly difficult. Take the time, while you’re gainfully employed, to build a network that will help you weather any professional storm that may come your way. If you’re not sure how to get started, check out these tips on building an awesome professional network.


45. Clean up Your Social Media. You might be used to posting those drunken party pictures to Instagram or Twitter. You might take to the pages of your favorite forums and blogs to complain about your job, your boss, or any number of other things. It’s time to reconsider what you make public. The reality is that most employers look at your social media and online presence before they’ll hire you.

An abundance of red solo cups or a propensity to post about ditching work could make you unemployable. Don’t be that guy. If you simply must post things you wouldn’t want an interviewer to ask you about later, remember to lock down your privacy settings first.


46. Safeguard Your Reputation. Similarly, your professional reputation can be a boost or a bane to your future job prospects. Even if you’re not fond of your current job, boss, or coworkers, you still need to do your best work. It’s far better to leave a bad job with nobody being able to say anything bad about your work, than to coast through and earn yourself a poor reference for your next position. Remember, the higher you climb in your chosen career, the more likely you are to attract haters who want to see you fall. Give them nothing to work with and they won’t be able to do much real harm.


47. Ask for a Raise. Not the first week on the job, obviously. But if you’ve been in your current position for a while without much more than a cost of living increase (or in some cases not even that), it may be time to ask your boss for a raise. Before you do, review that brag file you’ve been compiling, and try to find ways to quantify the work you do for the company. Do your research and see what others with similar experience in your field are making. Then, just ask. Be polite. Don’t threaten to leave if you don’t get a raise. Don’t beg. Check out these tips on how to ask for a raise, and then give it a try.


48. Consider a Side Hustle. At this stage in your life, you may have more free time than any other time until you hit retirement. It’s also the best time to start saving for future big expenses. Consider picking up a side hustle of your choosing. Pick something you enjoy and are passionate about, then find a way to make money doing it. Maybe start a blog or learn to code. Sell your artwork. Walk dogs. Babysit. Bake and decorate cakes. Tutor. Fix and flip cars. Hire out your services as a handyman. Check out this list of 99 ideas or our 50 Ways to Make Money guide. Whatever you enjoy, there is likely a way to market it. And who knows – it could turn into your main income someday!


Hack Your Finances

49. Challenge Yourself. Often, a little competition can bring out the best in us. Rather than competing against others (who may have very different circumstances than you) compete against yourself. Set challenges for yourself and then work to meet them. Aim to put away a certain amount of money in a savings account by the end of the year. Set a challenge to cut your grocery bill in half. Make it a game every day to see how long you can go without spending money on anything unnecessary.

For every goal you meet, reward yourself with an inexpensive prize, like your favorite candy bar or a night out with friends. As you get better at managing your money, it will begin to feel more natural and you won’t have to compete with yourself anymore.


50. Enjoy Anticipation. Having something to look forward to can really make your day. Psychologists have shown that anticipation of future happiness can create an intense emotional high. This can make saving up for something (whether a large purchase or a future experience) almost as sweet as having/doing the thing itself. Take advantage of this effect! Use the excited energy of anticipation to help you prioritize your financial goals.


51. Name Your Savings. It’s much easier to save for something concrete than an abstract concept. Name your savings account. You might call your vacation savings “Trip to Hawaii”. If you’re saving for a house, call it “Dream Home”. You can name your retirement accounts after things you plan to do in your golden years. Want to save money for college for the kids? Try “Doctor Johnny” or “Jenny’s Law Degree”.

Saving for a wedding? Name it “Mister Right” or “Happily Ever After”. Whatever  name you choose will help you feel a positive emotional response each time you add to those accounts, and in turn make saving money more enjoyable!


52. Keep Your Savings in a Different Bank. The harder it is to access your savings, the less likely you are to dip into it. If your savings account is in the same bank as your checking and debit card, it’s much too easy to transfer the funds instantly with just a few clicks. Keeping it in a separate bank where you’d have to wait a day or two for the transfer to go through can be enough to give you the willpower to resist using it.


53. Automate Savings as Much as Possible. For many, the less we have to think about finances and saving, the better. If you set up an automatic transfer to savings every payday, you won’t even have to look at your savings accounts, they will just start building up on their own. Set-it-and-forget-it savings is a great way to fool yourself into saving more!


54. Ignore Raises for as Long as You Can. You’ve probably heard about the concept of “lifestyle inflation”. It means that as we earn more, we tend to also spend more. So if someone is making $40K per year and barely getting by, and then gets a new job at $50K per year, they’ll likely be in the same boat in fairly short order.


55. Buy a Lunch Box. We all know that you can save money by bringing lunch to work instead of buying pricey meals at restaurants. But sometimes we need a little extra push to actually do it. Remember when you were a kid and the start of school meant you could pick out a new lunch box with your favorite cartoon characters on it? You actually wanted to take lunch to school in order to show off your fun new box.

The same thing works as an adult! Instead of a lunch box, pick a fun bento box, insulated bag, or other lunch carrier. You can find them in all shapes and styles. Pick one you really love and you’ll be inclined to use it more, and save money by not eating lunch out so often.

  1. Further Reading

    For more tips on saving money, be sure to check out the Official Coupon Code blog regularly, as well as the following sources:


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