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  • Lexi Eimbinder

5 Smart Money Moves to Make in Your 20s

Welcome to the decade of adulting - the time when you try to figure out life and (hopefully) learn from your mistakes. Growing up can be overwhelming, especially having to worry about paying your bills, keeping up with your social life or thinking about intimidating things like “budgeting” or “being financially responsible”(ughh). Frich is here to help you break the cycle of being broke in 5 steps.

1. Set your goals

Write down your financial goals both long and short term. Something special happens when you put a pen to paper and write down your goals. You’re more likely to actually achieve them, too (even Forbes wrote about it).

Make your goals specific and with a strict deadline. “I want to be better with money” is like saying “I want to lose weight one day”. That’s too vague. What you’re going for is, “I’m going to save $3000 this year by putting aside $250 a month. Break your goals down into micro-goals. To save $3000 a year, you need to save $60 a week. That feels more achievable, right?

2. Build your emergency fund

Remember the last time you hit that moment you had $0.00 in your bank account and really needed money ASAP? Remember finding yourself thinking “I wish I didn’t go for that dinner” or “if only I didn’t order in 3 times last week”. That’s why you need an emergency fund.

Ideally you’d need three to six times the total of your monthly living expenses. You might try to get away with a smaller emergency fund — even $1,000 is a better cushion than nothing. Almost 70% of Americans have less than $1,000 saved, so if you achieve this milestone, you’ll be in the top 30%! That feels good, right?

Understand that it’s OK to start with a smaller goal. Saving $20 a week (roughly $3 a day) adds up to $1,000 in a year, which already makes you good at “adulting”.

A good rule to follow is “paying yourself first” - set up an automatic transfer towards your emergency fund every pay day.

3. Earn $1000 extra a month with a side hustle

Sometimes saving and budgeting is hard not because you’re spending lavishly but you’re simply not earning enough money. Hello, being a student!

About 45% of American workers have a side hustle in addition to primary employment. Whether it’s freelance work, teaching or a creative side gig - side hustles aren’t only for extra “play money” but a very effective tool to reach your financial goals. $1000 a month ends up being 60,000(!!!) in 5 years and even more if you invest it.

You’ll never have more time and energy then you do right now. This is a precious resource, so instead of binge watching your favorite shows, put your spare time to use earning extra money.

4. Stop normalizing debt

If you have student loan or credit card debt, you should make paying it off a priority in your 20s. To prevent getting into more debt than you can handle, stick to only one or two good credit cards, and pay your balance off every month - stop normalizing living in debt!

Be proactive with your student loans. Refinancing replaces multiple student loans with a single private loan, ideally at a lower interest rate. To speed up repayment, choose a new loan term that’s less than what's left on your current loans. Here is a good video explaining it - because we all know how important this is!

5. Become F-rich

All of the above sounds like a lot of work? Frich can help you achieve your financial goals together with your friends with ease. Set spending and saving goals, keep each other accountable with friends, and compare your spending to people just like you to see where you stand!

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