Between graduating, starting a career, potentially moving to a new city or into a new home, getting married, and countless other life-defining events, your 20s are years filled with new experiences, opportunities, and life lessons.
Among the most important, and confusing: Figuring out your finances. And while everyone’s situation is different, there are some general financial habits and skills that experts recommend honing in your 20s. Now is the time, they say, to establish a sound financial foundation to build on for the rest of your life.
“It’s easy for younger consumers to kick the financial can down the road when they feel like they have their entire life to make better choices,” says Rod Griffin, senior director of consumer education and advocacy for credit reporting agency Experian. But “the choices they make and habits they form while they’re young will follow them throughout their adult life.”
With that in mind, here are the tips and tricks financial experts say recent grads and twentysomethings should know.
1. Consider—and possibly rewrite—your money story
One of the most important things to consider when you’re starting your financial journey is your money mindset, says Nicole Wirick, a Michigan-based certified financial planner. What is your relationship to money—for example, are you a spender or a saver, do you consider it scarce or abundant—and how does that shape how you treat it? What money scripts, or unconscious beliefs about money, do you follow?
“For many people, money could be seen as something that was used as a means of control, or maybe money was something that was approached willy nilly, or maybe it was really scarce,” she says. “Those memories of money from childhood can be really important to understanding what money means as an adult.”
Once you have that knowledge, you can use it to form better habits.
“We have the power to rewrite our money script, but we have to be aware of it first,” she says. “Otherwise the patterns can repeat themselves.”
2. Understand inflows versus outflows
Once you understand your feelings about money (and how they may help or hurt your finances), you can move on to building a solid financial foundation for the future, says Wirick. The most important: Understanding how much money you have coming in, and ensuring it’s more than how much you’re spending.
Sounds simple, but it’s easy to start overspending—and difficult to…