I Made These 3 Smart Moves in My 20s -- and So Should You

My 20s were an interesting time. They took me through college graduation, single life in a big city, marriage, and moving to suburbia. And along the way, I definitely made my fair share of mistakes. But here are a few smart moves I made in my 20s that have served me well since.

1. I built a six-month emergency fund

These days, SecureSave reports that 63% of Americans do not have the cash reserves to cover an unplanned $500 expense. But I never wanted to be in that boat. And one wise move I made in my 20s was to build up an emergency fund with enough cash to cover six months of essential bills.

Granted, my expenses look different today than they did in my 20s. I now have a mortgage and property taxes to contend with, not to mention the many expenses that come with raising kids. But the emergency fund I built in my 20s definitely served as a solid foundation and bailed me out of a potential financial jam.

When I was around 27, I found myself burned out after having worked a demanding finance job for five years. My mental health was suffering, so I quit that role and pursued freelance opportunities, resulting in a huge drop in income. I was able to tap my emergency savings at the time to make sure I didn't end up falling behind on essential bills. I also used that money to pay for health insurance, which I had lost upon quitting my job.

2. I started building a retirement nest egg

When I was in my 20s, retirement wasn't exactly on my mind. And I had different goals I was trying to save for, like eventually buying a home.

But still, I made a point to open an IRA when I didn't have a retirement plan through work, and I contributed to it as best as I could. And then when I was offered a 401(k), I continued to save for retirement even though my employer at the time did not offer any type of match.

One thing that motivated me to save for retirement was reminding myself that I was getting a tax break on my IRA and 401(k) contributions. But also, I knew that giving my money extra time to grow would put less pressure on me to save down the line.

3. I stayed out of credit card debt

I started using a credit card during college, but since I only worked part-time back then, I charged expenses sparingly. Once I got a full-time job in my 20s, my credit card usage increased. But not once did I fail to pay off my balance in full.

Of course, to pull that off, I had to be very careful with my spending. I actually followed a budget where I had my bills mapped out on a spreadsheet and I would track my supermarket spending weekly and so forth. It was sort of a dorky way to exist, but it was worth it, because it allowed me to enjoy the benefits of a credit card without running into financial trouble.

Make the most of your 20s

There are certainly benefits to being in your 20s, like having more energy and not having your bones and joints make sounds every time you move. But it's important to use your 20s to set yourself up for financial success in your 30s, 40s, and beyond, if you can. Try to save for emergencies and retirement, and aim to pay off your credit cards every month so you don't get stuck with lingering debt.

Now, I could tell you to set up a budget and follow it to keep your spending in check like I did. But you may not want to go that route. A better bet, however, may be to find a budgeting app that works well for you. Back when I was in my 20s, those didn't really exist (yup, I guess I'm that old).

Another thing I recommend is putting the savings process on autopilot. Set up an automatic transfer to a savings account and/or IRA so you don't have to think about getting that account funded. It's a system I use today, despite no longer being in my 20s, and I have to say that it works quite well.