7 Smart Money Moves to Make in Your 20s
Whether you just walked across the graduation stage or you're stepping into your first full-time job, you're entering one of the most exciting and financially defining chapters of your life. You've earned the degree, but odds are, no one handed you a financial playbook. That's why so many young professionals feel like they're figuring out money on the fly, navigating paychecks, benefits, student loans, and savings without a clear roadmap.
At Hyperion Wealth Group, we believe early-career planning doesn't have to be overwhelming. It's about building smart habits, one step at a time. This guide, inspired by
RBC's Money Matters for Young Professionals breaks down the foundational moves you can consider making in your 20s to set you up for long term financial success.
Understanding your season
You're in what we call your Foundation Season. This isn't the time to have it all figured out, but rather, it's the time to start laying the groundwork. Your habits today will fuel your options for tomorrow. But just like your career will evolve, so will your financial life. Over time, you'll move through seasons like:
- The Growth Season (late 20s to 40s) where income increases and the focus shifts to investing more, buying a home, or starting a family
- The Preservation Season (typically late 40s to early 60s) when protecting your assets, minimizing taxes, and planning for retirement take center stage
- The Legacy Season (mid-60s and beyond) where you focus on strategic estate planning, charitable giving, and transferring wealth with intention
1. Budgeting that actually works
Whether you love spreadsheets or prefer a simple app, budgeting can be both effective and empowering. Start with a simple 50/30/20 rule:
- 50% of your income goes to essentials: think rent, utilities, food, transportation
- 30% to wants and lifestyle choices like dining out, concerts, travel, streaming subscriptions
- 20% to savings, investing, or debt repayment
Customize this to fit your income and goals. The key is intention. When you know where your money is going, you're in control of your future not just reacting to it. Don't forget to budget for annual or irregular costs like insurance premiums, holiday travel, or your best friend's wedding.
2. Build an emergency fund
You've probably heard the term emergency fund, but here's what it really means. It's money set aside for life's unexpected turns, like a job loss, medical bills, car repairs, or even needing to relocate for a new opportunity. Our team likes to think of it as a freedom fund, meaning it gives you the ability to take a career break, leave a toxic job, move to a new city, or make decisions on your terms without being dependent on others or racking up debt.
Start with a goal of saving 1-2 months of living expenses, and gradually build to 3 to 6 months. Keep it in a high-yield savings account, separate from your checking, and try to automate transfers each payday.
3. Start investing today even if it's just a little
The biggest advantage you have in your 20s isn't income - it's time. Even small investments now can grow into significant wealth later.
Open a Roth IRA or contribute to a 401(k) through your employer. Be sure to check if your employer offers a Roth 401(k) option. Many companies already offer this feature to their retirement plans and more are planning to do so. A Roth 401(k) allows you to contribute after-tax dollars beyond the individual Roth contribution ($7,000 for 20251) so your money grows tax-free and qualified withdrawals in retirement are also tax-free. This is especially valuable during your Foundation Season, when you're likely in a lower tax bracket and can lock in long-term tax advantages.
4. Know your paycheck and benefits
That first paycheck might feel smaller than you expected thanks to taxes and deductions like Social Security, Medicare, and benefits. Take a moment to review your paystub and understand what's coming out and why.
If your employer offers health insurance, know your plan options. A high-deductible plan paired with a Health Savings Account (HSA) for example can be a smart move. Contributions are pre-tax, it benefits from tax deferred growth like an IRA, at certain levels can be invested, and qualified withdrawals are tax free. These details make the HSA a triple tax free investment tool.
Review all of your company's retirement options for contributions and company matching programs. Even without a 401k match right away, starting contributions to your company plan or an HSA helps build early momentum. Don't overlook benefits like life or disability insurance as well. Treat your benefits like part of your compensation, because they are.
5. Get in front of debt (before it gets in front of you)
Whether you have student loans or credit card balances, having debt isn't necessarily a bad thing, but not managing it is. Start by making a list of all your debts, including balances and interest rates. This gives you a clear view of what you owe and which debts are most urgent to tackle. High-interest debt (like credit cards) should be your top priority, because it can snowball quickly if ignored. At the same time, understand your student loans, such as your grace periods, repayment plans, and whether you qualify for any federal programs.
The good news is you don't have to choose between paying off debt and investing. With the right plan, you can balance both. A thoughtful strategy, especially with the help of an advisor, can help you weigh the opportunity costs of each dollar and make smart progress on multiple fronts.
6. Understand and monitor your credit
Your credit score isn't just a number. It's your financial reputation. While many credit card companies and banks give you access to your "soft" score, your full credit report tells a much deeper story. Each year, you're entitled to one free credit report from each of the three major bureaus (Equifax, TransUnion, and Experion). You can find these at AnnualCreditReport.com. Reviewing these reports is one of the best habits you can build in your 20s.
Checking your full credit report allows you to:
- Catch identity theft or fraud early
- Correct any reporting errors
- Understand how lenders view your borrowing history
Your credit score affects your ability to rent an apartment, get a loan, or even land certain jobs. Start tracking it now, and take steps to protect it by paying bills on time and keeping credit card balances low. Set a reminder to review your reports each year. Many clients do this during tax season or around their birthday.
7. Build financial confidence
At Hyperion Wealth Group, we're passionate about helping clients feed their heads with purposeful information. In today's world, the challenge isn't access to content, but it's knowing what is actually worth your time and attention. Building financial confidence early is crucial because it empowers you to make informed choices, avoid costly mistakes, and feel in control of your financial future. The earlier you start, the more prepared you'll be to handle both opportunities and setbacks with a clear head.
Financial confidence comes from clarity, not perfection. If you're looking for a place to start here are few of our favorite things:
- Reading or listening to the book The Intelligent Investor by Benjamin Graham to build your investing IQ
- Subscribe to financial magazines for practical financial tips
- Visiting HyperionWealthGroup.com for wealth planning and investment strategies
Final Word
Congratulations on making it this far! This is your decade to lay a foundation that supports freedom, flexibility, and future wealth. Just by reading this blog, you are already taking meaningful steps toward a successful financial future. As you move forward, remember building wealth isn't just about discipline, but it's also about learning, growing, and enjoying the ride. Our team is here to help you at any stage and happy to schedule a consultation to ensure you are taking the appropriate steps in your journey.