Developing good financial habits in your 20s is so important because it'll change your finances FOREVER. It's important to learn how to start a budget, how to save money, how to start an emergency fund and so much more #money #finances #financialhabits
Finance, Make Money, Self-Development

Financial Habits You MUST Develop in Your 20s

Any 20-something you meet who is right out of college is going to tell you they would love to be rich. Well maybe not all, but most. We all aspire to have enough money to live our dream lives and the only way to do that is by building up good financial habits at a young age!

Money habits are hard to figure out when we aren't taught about them at all. There are certain financial habits that you must develop in your 20s for a more secure financial future. Learn how to budget, how to save money, how to make more money, and how to start investing when you're young. | emergency funds | save money

Since we live in a society where most schools teach very minimal financial education we really need to keep ourselves informed and know what the heck is going on with our finances.

For this reason, I’ve compiled a list of 15 financial habits that will help to make any 20-something rich in their 20s and beyond. For a better financial future.

15 Financial Habits You Must Develop

Create a Budget You Understand

There are so many different budgeting techniques out there. Like hundreds. And they’re complicated. It can take a lot of work to truly understand what all of your options are.

Don’t worry about trying to blend different budget options together. Pick one and stick to it for a while. If it doesn’t work, move on to a new one.

You want to make sure the budget you’re following is something you can understand without pulling out your hair. Something that’s super easy to follow and understand is the 50/30/20 budgeting principle, personally, I’ve had some issues using this budget because it isn’t set in stone and things can move around too easily.

For this reason, I really love the Zero-Based Budget because it makes a plan for every single penny you take in and shows you where to put them. It’s pretty great. If you have trouble sticking to a budget the Zero-Based Budget is a great place to start. 

If you have a plan for your money you’ll understand where it’s going and where you can do better and you’ll be under continuous financial improvement.You’ll have the money budgeted for the things you really want and you won’t spend them on stupid things that don’t interest you.

Plan Ahead for Big Expenditures

As our friend and foe Dave Ramsey would say “Christmas comes EVERY December, it doesn’t sneak up on you”. This couldn’t be truer. If you have a lot of presents to buy over Christmas time, or a month with a lot of birthdays, PLAN AHEAD.

Do you know that your car is going to need new brakes in around 6 months? PLAN AHEAD.

Have an account just for saving up for these big expenditures that you know are coming. These accounts are known as sinking funds and they can seriously save your finances. Sinking funds allow you to avoid using credit!

Have Emergency Money Ready

Young people are known to think they’re invincible. Not in a silly way, in an “I’m young, I can’t get sick, or fired!” We don’t plan for the future and we think that there won’t be any emergencies in our lives because we’re young and healthy.

An emergency fund is going to help give you peace of mind and will make it so you aren’t as stressed when little emergencies do come up. 

Having an emergency fund is key to not throwing things on credit. Credit cards have interest rates and interest rates aren’t fun! 

Take a Side Job for Extra Income 

You’re never going to be younger or have more energy than right now. We live in a society where having just a 9-5 income isn’t going to let you live the life that you want. There are so many people out there that live a life they hate and spend so much time just sitting on the couch watching Netflix when they could be making more money and building a future.

I’m a HUGE fan of sidehustles. It doesn’t have to take up all your free time. You can start a sidehustle that makes you a couple hundred bucks a week with just a couple of hours of work a day! That’s pretty fantastic.

Start a blog, walk dogs, baby sit, house sit, be a youtuber, do just about anything that can bring in income. You’ll be able to pay for trips or do fun things with this money and still have your 9-5 income for real grown up things. One key to building a side income is doing something that can create you passive income because you can make a ton of money while you’re asleep! 

Live Way Below Your Means

You do not need a $2,000 couch. You do not need a brand new car.

You need to live below your means and not waste money on silly things. Living below your means doesn’t always mean you can’t have any fun, but it does mean you’ll be able to have more fun later when you have millions in a retirement fund and no debt.

Skip Expensive Food & Drink

Do you really think that $5 Starbucks coffee every morning is necessary? Do you need to eat out 3+ days a week?

Most people that spend tons of money on food and drinks are in debt. They’re charging everything and they just think that’s how life is supposed to be.

When you buy a $5 coffee and it stays on your credit card for a year because you’re just paying minimum payments, it’s no longer just a $5 coffee.

Minimalize Your Life

Minimalizing your life can be a great way to both make money and save money. No one needs a wardrobe with 100 items in it unless you’re a model or a Kardashian. If you declutter your life and get rid of knick-knacks and clothes you can easily make a couple hundred dollars by selling it all!

Put that money toward debt or savings and bam! you’re rich.

Choose a Modest Place to Live

No one should ever be spending more than 25% of their total take-home income after taxes on their home/apartment. Have a low income? Stay with mom and dad until you can get that up and get a place under 25% that you like at least a little bit. You’re young. You don’t need to have the perfect home in your 20s.

Save up your money for a huge downpayment on a home you’re obsessed with and your mortgage will be nice and low!

Don’t Avoid Your Student Loans

Student loan debt is never going to go away. It doesn’t just disappear. They will come after you for that money. And once again, the interest rates are killer.

If you can get some kind of student loan forgiveness program, do it. Try everything you can to get the amount down. But you’re still going to have to pay it someday.

Don’t Postpone Retirement Savings 

You’re young. I get that. But time flies when you’re having fun and retirement isn’t that far away. You may think that you don’t need to start for many years but that’s just not true.

The more money you start putting away for retirement now the more money you’ll earn in interest by the time you turn 65. The good ol’ power of compound interest! She’s a beauty.

Don’t Depend on Credit Cards

There’s a common feeling among people who carry credit cards that their credit limit is just money that available for them to spend. So many people think that they can just hit their credit cards with all sorts of charges and everything is going to be okay.

And to be honest, I’ve been one of these people. In University I was working 30-45 hours a week and making okay money doing it. Living at home and having very few expenses other than tuition and textbooks. I still had a maxed out credit card every single month. Why? Because I just assumed that that’s how everyone lived and having credit card debt to have things you want is normal. It may be normal, but it’s not okay.

If you really want to make the most of your money pay cash. Or use a rewards credit card that you pay off in full (or close to it) every single month. There are a bunch of credit card rules that can make using credit so much simpler. 

Never Finance a New Car

Car payments can be a real burden if you can’t actually afford them. It may be “normal” for everyone around you to be financing their brand new car and paying 500+ a month for it, but it’s not a smart way to go.

There is no reason why you can’t drive a 5+-year-old car for a few years while you build wealth and pay down debt. Just because your friends are driving a new car doesn’t mean you need to be sucked into monthly car payments. Pay for a vehicle in full and your only expenses for it will be gas, insurance, and maintenance. Financing a new car is never the smart decision! 

Don’t Focus on Everyone Else

These days everyone boasts about their life on social media. You only see the best parts of their day. The thing we don’t see is the money situations behind these people.

There’s a girl I’ve known for a few years who posts all the time on social media about trips she’s going on. I still don’t know how she affords it. It’s either mommy and daddy’s money, or she’s charging everything and is in massive debt. Unfortunately, all most people see is the fancy life she’s living and they get serious FOMO.

Focusing our attention on what other people are buying and driving and eating is only going to make us feel worse about our situation. The fact of the matter is, if you just focus on living your life and achieving your money goals, you’ll be so much better off in the long run.

Learn How to Invest

Investing can be so so so complicated to get into, but it’s one of the absolute best ways to build wealth. Having your money make you more money can be extremely satisfying but most people have no clue where to even begin. Get yourself started doing some basic research on investment types and where you can invest your money.

It isn’t as complicated as it may seem to the untrained eye. Investing can be a great future for you.

Never Stop Learning

The most important characteristic a person can have is being humble. If you think that you’re the smartest person in the entire world you’re never going to improve.

There is nothing better for you than to read more books about personal finance and investing and retirement. Never think you’ve learned it all because things never stop changing!

The financial principals that your grandparents were able to follow aren’t the same ones that work today. So if you learn everything tomorrow will it still work in 50 years? Nah. So keep learning.



If you know of any other financial habits that can kick-start your journey towards wealth, let me know in the comments below! 

xo Taylor


Hey! My name is Taylor O’Halloran and I’m a huge fan of saving money any way I can.I’m obsessed with dogs and I love all kinds of cheese even though my stomach hates it.  I’m a recent university graduate who just wanted to do her own thing and see what happens! Follow me on the journey!

Taylor O'Halloran

Hey! My name is Taylor O'Halloran and I'm a huge fan of saving money any way I can.I'm obsessed with dogs and I love all kinds of cheese even though my stomach hates it.  I'm a recent university graduate who just wanted to do her own thing and see what happens! Follow me on the journey!


  1. Great tips! I went debt-free after my doctorate degree within 3 years of graduation!
    ~Jessica | Petite Style Script

    1. says:

      That’s super impressive! Becoming debt free takes most people their entire lives and It’s so important to really be able to live.

  2. Great advice – especially the part about living way below your means!

  3. Great tips, even for a late 30s like me. Those coffees can definitely add up. We make out coffee at home and the occasionally treat at the coffeeshop makes it more enjoyable too.

    1. says:

      That’s always a good way to do things! Would definitely make that $5 coffee taste a whole lot better

  4. Excellent tips! Those coffees add up quickly over time! Kicking that habit was one of my best decisions!


    1. says:

      Ugh I know. It just doesn’t taste as good at home either! But when you really think about it it’s sooooo much money!

  5. Living below our means has been my and my husband’s goal for years! Easier said than done, but who needs big fancy vacations twice a year, anyway?! 😉

    1. says:

      Haha, vacations are the thing I miss the most while getting out of debt. Just have to remind yourself that vacations are a luxury!

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