5 Ways to Kickstart Your Financial Freedom: Strategies for Money in Your 20s
Kat Sanford | The Abundance Alchemist
March 27, 2023
Hey there! Are you in your 20s and trying to figure out how to manage your money? You're not alone. This is a time in your life when you might be starting a new job, living on your own for the first time, and trying to figure out how to balance your expenses with your income.
It can be a lot to handle, but with some good money management practices, you can set yourself up for financial success. Read on for five ways you can start your journey to realizing financial freedom in your 20s.
#1 - BUDGET
The first thing you should do is create a budget. This might not be the most exciting
task, but it's essential if you want to keep track of your money and avoid
overspending. Start by listing all of your monthly expenses, such as rent,
utilities, groceries, and transportation. Then, subtract these expenses from
your monthly income. The amount that's left over is what you can use for
discretionary spendings, such as entertainment, dining out, and shopping. You know...all the fun stuff! Sticking to your budget as much as possible is important to avoid going into debt.
BONUS TIP: There are lots of great budgeting apps, but I recommend a paper budget when you first start budgeting. There is something powerful about having to write down your numbers. Grab your copy of the Quick Budget form (provided courtesy of Ramsey Solutions) here.
#2 - AVOID DEBT
Speaking of debt, it's crucial to keep debt under control in your 20s. If you have student
loans or credit card debt, make sure you're making at least the minimum
payments on time every month. If you can, try to pay more than the minimum to
reduce the amount of interest you'll pay over time. If you're struggling with
debt, consider talking to a financial advisor or credit counselor who can help
you come up with a plan to pay it off. And pay cash as often as possible instead of using your debit or credit cards.
#3 - START SAVING
Another important aspect of money management in your 20s is saving for the future. Even if retirement seems far away, it's never too early to start saving. Consider contributing to a 401(k) or IRA if your employer offers one, and try to save a portion of each paycheck.
You should also build an emergency fund that can cover at least three to six months' worth of expenses in case of a job loss or unexpected expenses.
#4 - PRACTICE MINDFUL SPENDING
When it comes to spending, try to be mindful of where your money is going. It's easy to get caught up in the latest trends or social events, but it's important to prioritize your financial goals. Ask yourself if a purchase is something you really need, or if it's just something you want at the moment. Try to focus on experiences rather than material possessions, as they tend to bring more long-term happiness.
#5 - TALK TO A TRUSTED ADVISOR
Finally, don't be afraid to ask for help or advice when it comes to money management. Your parents, friends, or financial wellness coaches (like me) can offer valuable insights and tips to help you navigate this phase of your life.
In conclusion, money management in your 20s can be a challenge, but with some discipline and focus, you can set yourself up for financial success. Remember to create a budget, control your debt, save for the future, be mindful of your spending, and seek advice when needed. You can do it!
Kat Sanford, aka “The Abundance Alchemist” is a financial wellness coach for women entrepreneurs and their families. As a Ramsey Solutions Master Financial Coach, she is passionate about helping people feel empowered when dealing with money so they can achieve the financial freedom that allows them to live a purpose-filled, prosperous life.
Kat has been published in the Bay Area Houston Magazine. is a FemCity contributor, and speaks on money mindset, budgeting, debt reduction, and heart-centered leadership.