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  When in their 20s, most youths live carefree lives without a care in the world about what to make of their finances. Some of them, under the guise of the mantra, “We live to fight another day”, spend recklessly. For them, the goal is simple – live and enjoy life at its fullest, but most times, they forget that the future is what you make of your today. While this post is not about criticising youthful enjoyment and relaxation, it sheds light on the importance of planning for a better life.
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Your 20s are your foundational years, and if you start with a shaky financial foundation, you’ll struggle to attain financial freedom and independence. 20 years down the line, will you look back and be proud of your financial choices? If yes, then you should raise your shoulders high, but if your answer is “no”, then keep your eyes glued to this article. In this article, we’ll be diving into the Smart Money Moves one should make in their 20s.

Smart Money Move 1: Carry out a Financial Inventory

This is where it all begins. To build solid finances, you need to start by examining where you currently stand. Taking inventory simply means accessing your finances by understanding your income and liabilities. You need to be able to track your cash flow, that is, money coming in and money going out. To effectively achieve this, you need to make a list of your income sources, such as your primary job, side hustles, and passive income sources. It is also important for you to know your gross income (income before tax)  and your net income (income after tax). After looking at your income flow, you also need to assess your liabilities or debt, if any. It could be a student loan, business loan, loan from family or friends, etc.

Smart Money Move 2: Create a Budget

A budget is a financial roadmap that helps you keep track of your expenses. Creating a budget and sticking to it gives you control over your money instead of the other way around. Most people think that having a budget means being restricted, but that’s not true. If you want to dine at your favourite restaurant, that’s fine, but make sure it’s budgeted for. If you want to buy new clothes, add them to the plan/budget. With this, you’ll be able to account for where your money is going.

Smart Money Move 3: Live below your means

Wisdom demands that you spend only what you can afford to part with. Just because you can pay for it doesn’t mean you should buy it. Learn to differentiate between your wants and your needs. In your 20s, you’ll be tempted to conform to social media lifestyles or peer pressure, but ensure that you do not fall for it. Living below your means is a smart money move which, when perfected, can free you from financial debts. One of the greatest ways to achieve this is to say “no” to impulsive buying.
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Smart Money Move 4: Start Investing Now

Investment is one principle of finance which people trivialise in their 20s but wish they paid more attention to in their 30s and 40s. Don’t let that be you. It is never too early to start investing. You don’t need to be rich before you start investing – start little and grow gradually. You can utilise diverse investment platforms, such as Bamboo, Trove, etc, to invest in stock or shares; however, before you start, ensure you do your due diligence by conducting research. Also, understand your level of risk tolerance, and don’t be afraid to talk to a financial advisor if you cannot do it on your own.

Smart Money Move 5: Save and Build an Emergency Fund

The unpredictable nature of life makes this a necessity. A medical condition might arise, or an unforeseen event might rear its head, and while nobody prays for this, it is important to be prepared. Your savings or emergency fund gives you something to fall back to.
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Concluding Thoughts

The financial freedom and independence you want to attain in your 30s and 40s start with making Smart Money Moves. Your 20s are the perfect time to build a strong financial foundation that’ll see you through the journey of life. Your future self is counting on you – don’t disappoint it.
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This article was first published on 1st June 2025
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victor-ifegwu-mbonu

Ifegwu-Mbonu Victor is a Personal Growth and Leadership Trainer who provides training and coaching to individuals and organizations.

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