How To Save Money in Your 20s: A Comprehensive Guide

Saving money in your 20s can be difficult, but it’s not impossible. If you’re not sure where to start, this comprehensive guide will help you make a plan and stick to it. You’ll learn how to save money on groceries, travel, housing, clothes, and more. You’ll also find out how to make money in your 20s so you can start building your savings.

So, whether you’re looking to save for a rainy day fund or you want to start investing for your future, this guide will give you the tools you need to make it happen.

There is nothing that can take the sting out of saving money in your 20s like a budgeting plan. Whether it’s your first time or you have never done anything similar. There are probably some people who have found success through budgetary planning — maybe you just need to get started. We’ve got you covered. Read on to learn everything from why we do what we do to tips on getting started.

How to Start Saving

The beginning might be hard, but it’s not impossible. People should take a year off work to build their financial future. Then they go about making plans to move back into the workforce, and most likely, to build careers too.

The good news is that if you follow these simple steps, you can build your savings strategy and create your own financial roadmap. All with no money down, or even without borrowing from a bank loan. Here’s a list of our best savings advice so it’s easy to find information.

Pick a Savings Plan

Start by choosing a savings plan. That means you should pick a strategy that will support your goals and reduce risk and maximize growth. Some things you should pick are whether you want to save for retirement, a place where you live, or both. As you get closer to understanding your needs, investing strategies can help you get real value from savings. You may also need to think about saving for your children as that can also impact your financial future.

When deciding which savings plan to go under, consider if you’re working towards investing your savings into something you like (e.g., stocks instead of bonds) or if you’re using inflation-protected funds (e.g., Roth IRAs). Know the risks of different approaches to achieve desired outcomes.

Find What Works for You

Before you head in any direction, it’s important that you start thinking about what works for your specific goals and needs. If you’ve never worked remotely before or haven’t yet decided whether to do so, now might be a great time to start looking into it. Online websites offer free trial access to tools without a bank account or credit card.

If looking to upgrade, financial advisors can help identify a path to upgrade. Depending on your situation, this could mean different things, including having employees at home and your own small business. Also, it might mean working remotely once you’re more established and familiar with the new skill set.

Of course, sometimes you’ll need to go through a bit of trial and error to figure out what works for you and what doesn’t. Just keep trying and you’ll soon be able to figure out exactly what works for you. Don’t forget to look under the hood and really dig in to understand how your finances work so you can take advantage of its power.

Keep Track of Spending

You don’t always want to spend everything you earn right away on things like car payments, vacations, or gym memberships. Instead, keep track. Set aside part of every paycheck toward other expenses like utilities, groceries, clothing, gas, and auto insurance — whatever that little extra cash might feel like for the next month or two. If you’ll be receiving much less during those times, let that go toward an expense or use it to fund yourself.

This keeps you motivated and engaged in your savings goals. At the same time, also check the monthly bills that accompany a certain expense to make sure you’re paying some of them. If there’s an expense, you’ll pay but don’t want to pay monthly, then keep tabs on how much you owe or how long the payment is going to stay owed. It can help gauge whether you’re spending wisely or not.

Create a Budget

Your time frame to start budgeting could range from three months to 12 months. For many of us, the idea of budgeting is confusing and intimidating. That’s because it’s confusing to many people. That starts with figuring out what budgeting actually is — it’s not a set budget. Rather than picking a yearlong budget, you can actually pick a daily budget for a few tasks every day.

And once you begin to create your budget, remember that doing so alone won’t give you the full picture. You’ll evaluate your finances, in general, to identify what’s functioning and where adjustments are required. You’ll also hunt for cost-cutting opportunities every day.

All of that will work against you over the course of the year. While looking at your budgeting process, note which categories you spend the most on, whether you allocate those to specific accounts, and whether you track whether you’re creating a budget and sticking to it. Note that “your budget” is still important. Not only does it determine what kinds of expenses you budget for, but it also defines what money will come from specific sources.

Use Cash Stocks and ETFs

Dealing with debt takes up most of your budget allocation. But when it comes to saving for retirement, you might just want to save even more when you’re ready to retire. One way to do that is by buying a portfolio of stocks. These types of portfolios make it easier for us to hedge any single asset you have and diversify. The fact that equity portfolios are generally secure investments and perform well in low-interest rate environments is their strongest advantage.

Stock prices usually go up when interest rates go up, and while it makes sense to hold a mix of equity assets, you can keep your money in a 401(k) if you decide to invest. Another big factor is that some equity-type investments like commodities are often a better option because they generate higher dividends. Overall, when thinking about earning less than you have to and keeping savings for retirement, equities are one way to be proactive.

Know Where Your Retirement Funds Will Be Managed

After you have your budgeting plan and a financial blueprint for where you’ll be able to save for retirement. It’s time to decide where your retirement cash is going to be stored. Many people choose to invest in a multi-stock portfolio or in a tax-protected bond fund. Both are rational choices if your income is sufficient to shield your retirement funds from taxation. Investing in other types of securities too is a common and valuable thing to do.

Another tactic for stock investors who aim to increase their net portfolio size is diversification. They can look beyond the current market and add value from outside markets. So, whether you’re an investor, a private individual, or someone who wants to gain exposure to alternative markets like cryptocurrencies, staying informed is vital. As they say, knowledge is power.

Follow an Asset Allocation Strategy

Next, it’s time to sit down with your advisor and make your choice. If you’re in the realm of retirement planning and saving, it’s time to consider a strategy that will allow you to increase your retirement funds to match your goals. With investment strategies like mutual funds and pension plans, you can do so much more than just move your investments. Plus, investing in alternative assets like futures gives you several options for your retirement income as well.

Finally, if you’re already invested in stock shares, you can use mutual funds and exchange-traded funds. These are stocks bought by investors and traded on exchanges to make more money. If you have your eye on stocks, it’s also helpful to look at your portfolio and see what else you should be adding to it. Consider your current financial position — what percentage, and what kinds of investments, you’re already holding — and then use that as your starting point.

From there, assess what it would look like to add a second or third investment. Next, do an assessment of your life and how much risk you are willing to take.

Create Savings Accounts

If you’d like to combine all of the aforementioned factors, investing in high-yield bonds (like a U.S. Treasury bond or a global currency) with other investments would be ideal. That means you might want to look into funds that have guaranteed returns. Bonds are usually bought and sold on average five times per year for around 1 percent — a return rate of 3.5 percent. Higher returns mean potentially more money earned for retirement as interest on the principal.

Another great option would be putting your savings dollars somewhere where you can make more guaranteed returns. The amount of money you save for retirement will affect where your savings go. Since the idea is to preserve your nest egg, having it in the home or in an account where interest is at least a third of your total savings will be highly beneficial. However, the main question is whether or not you want it to be just the nest egg.

If that’s the case, putting your savings in deposit or savings accounts offers a nice boost of retirement income.

Understand Why You Want to Save Money

If you’re serious about saving for retirement, it’s essential that you understand why you’re going out of your way to saving for retirement. Because retirement is a significant savings goal, it makes sense that you know how to save for it.


The 20s are a time for young people to figure out what they want from life. It’s an important decade where you’re expected to be financially responsible, and make good decisions in terms of your career and personal relationships. Of course, some of us are better at this than others. This guide aims to help you get the most out of your 20s while also saving money. Hopefully, with these tips, you can enjoy a more stable financial future!