Your 20s are an excellent time to gain experience and explore your future. However, they can also be a time to accumulate debt and develop less-than-ideal habits. Fortunately, there are several smart money moves that you can make during this time. Forbes lists five of these steps to take to ensure your financial well-being.

Building a nest egg

The first step to building a nest egg is to get started early. Many employees begin by putting a portion of their paycheck into a retirement account. In their 20s, this money can grow and continue to provide a reliable source of income. Building a nest egg is essential to secure your financial future. You should aim to have at least $500,000 set aside in your retirement account. However, some people need much more money, and others might need a smaller nest egg. A retirement calculator can help determine how much nest egg you need.


The first step to building a nest egg is determining your future financial goals. These goals can range from financial freedom to education and retirement. Building a nest egg for children differs slightly from building a nest egg for yourself. Unlike an adult nest egg, children’s nest eggs are managed by a custodian. The custodian holds the funds in the account until the beneficiary reaches a certain age, typically 18 or 21 in some states. When the beneficiary reaches maturity, they are granted full access to the account.

Setting up an emergency fund

One of the smart money moves you can make in your twenties is to set up an emergency fund. This money can help you pay for unexpected expenses, like car repairs or medical bills. It will also help you if you overspend or get into debt. As a young person, you may be tempted to spend all your money on luxury goods or start with stocks trading. However, the more you spend, the faster your money depletes. You could be forced to sell your expensive goods to survive if you do not have enough money to cover your expenses.

Paying off debt

One of the best money moves to make in your 20s is to get out of debt as quickly as possible. This is important because debt can negatively affect your credit score. Lenders may see you as a risky borrower with a large debt balance, and you may have a difficult time qualifying for financial products. In addition, carrying debt can lead to higher interest charges. Paying off debt in your 20s will help you establish financial freedom, opening many doors for you.

One of the smart money moves to make in your twenties is to eliminate credit card debt. This can help you establish a stable financial future and prevent you from facing financial crises in the future. It is also important to build an emergency fund. By paying off debt and saving for a rainy day, you will be more likely to achieve your goals in the future.


Investing wisely while still young can lead to a better financial future in your 30s. For instance, having a good credit score allows you to get lower interest rates and easier credit approvals. This can save you tens of thousands of dollars throughout your life. Moreover, it can provide you with financial flexibility in
cash emergencies. You can take advantage of short-term personal loans, which have flexible terms compared to traditional savings accounts.

Another benefit of a good credit score is lower car insurance rates and lowered deposit requirements with utility companies. Investing in the right way during your 20s will help you accumulate a nice nest egg for the future. You may not need a massive sum of money in the early years, but you can still invest a small amount every month and get good returns in the long run. Investing in retirement accounts can help you keep up with inflation and reap the benefits of compound interest.