When it comes to your financial well-being, your 20s are totally fundamental. This is the time when most people start to accrue debt – everything from credit card debt to “good debt” like student loans and mortgages.
However, simple math shows that people who start saving in their 20s are more likely to build more wealth over their lifetime than people who start later. So even though you may not know exactly where life will lead yet, don’t wait to start saving!
Here are five ways to get started saving money in your 20s, which will prepare you for greater financial success down the road.
1. Start with your employer’s retirement program
The job market in 2019 is competitive, which means more and more employers are starting to offer 401(k) or other tax-advantaged retirement savings plans. And on top of that, many employers offer some kind of matching program.
Employer matching programs are one of the best benefits that many employees overlook, but if you don’t participate, you’re missing out on free money. In addition to employer match dollars, most 401(k) plans offered by companies include ways to make saving simple – like an automatic deduction from your paycheck. When it’s that easy, there’s no excuse to start saving!
2. Tackle Your Debt Head-On
Another powerful way to save money is to eliminate your debts. Some debts, like student loans, have standard repayment options that can cost you years or even decades of interest if you pay only the required payment.
The highest interest rates are typically associated with credit cards or other types of consumer debt. If you feel overwhelmed by your credit card debt, the best thing to do is look for resources to help. There are credit card debt experts who can recommend the best approach to help protect you and your long-term financial wellbeing. This could include consolidating your debt with a personal loan or using a balance transfer credit card.
The sooner you make a plan to tackle your debt, the sooner you’ll break down that barrier to saving even more.
3. Put Your Bills On Autopay
This is one of the easiest tactics to make saving in your 20s easier. While one late payment or two might not seem like much, they can add up over time. Even one late payment can negatively impact your credit score.
Avoid getting hit with late payment fees by setting your bills up on autopay. You can usually set up an autopayments online, which means in less than five minutes you can be on your way to a more stress-free life.
Honestly, you could probably set up autopay for your bills faster than you can read the rest of this article. In fact, you should go set those up right now! Don’t worry, we’ll still be here when you get back.
4. Make Your Budget Your BFF
A budget is one of the most powerful tools to help you save money. And there are so many amazing budgeting tools out there that there’s no excuse not to make one! Thanks to all the different technologies out there, you can easily create a budget for yourself in under an hour.
A great budgeting tool for beginners is Tiller because it’s super easy to get started. Another free budgeting tool I like for its flexibility and goal-setting functionality is Personal Capital. Many of my friends use Quicken. Start with one of those, and if they don’t float your boat, there are easily dozens of other options out there.
It’s all about finding the tool you like best because budgets are only helpful if you continue to stick with them. Budgets provide insights into your spending and savings habits that allow you to make better financial decisions and avoid the financial missteps that so many people typically make in their 20s.
5. Side Gig to Success
If you’ve been thinking about starting a side hustle, I’m here to tell you to go for it. Whether it’s setting up an Etsy shop, becoming a DoorDash driver, or just putting together Ikea furniture, don’t hold back!
A side gig is one of the best ways to boost your savings because extra income means more money that you can set aside or throw at your debt. Side gigs are also great ways to meet new people, dabble in entrepreneurship, or spend time doing what you enjoy. If you have a car, driving for Uber or Lyft just a couple hours a week is an easy, flexible way to cover the costs of gas, maintenance, and insurance.
Building healthy savings habits in your 20s will be one of the best decisions you ever make. No one ever regrets starting sooner, so don’t wait to try these simple savings strategies. As soon as you start implementing good savings habits, you’ll not only feel more in control, but you’ll have many more opportunities start coming your way. Trust me, your future self will thank you!
