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5 helpful tips for financial planning in your 20s

Planning & protection

18 January 2022


Elizabeth Webb

Young couple begin financial planning

The money habits and decisions you make in your 20s can impact your lifetime financial journey and taking the right steps at this age can help you build a solid financial foundation for later years. They don’t need to be massive changes either, but over time, creating small habits you can stick to will help you significantly in future. Here are 5 helpful tips for financial planning in your 20s.


Understand what your money does

When you’re in your 20s, you will be early in your career and potentially will not have had to really consider what to do with money before. You may also suddenly find yourself with significantly more money than you have been used to and so may need some help in understanding how to best to make it work for you.

The first step to your financial journey at this age is to understand what money does, can do and how it can protect you and give you freedom as well. This will be individual to you and so you will need to have a good look in the financial mirror to understand this and may need some help to understand what your money can do as well.


Financial planning in your 20s for life events

At this age, chances are you will be starting to become financially independent and want to start planning for a number of significant life events. These could include anything from higher/further education, getting married and buying your first property.

Financial planning in your 20s - young couple build bed in new property.

Developing a budget will help you to make decisions about your finances and it is crucial to building a financial foundation to help you to achieve your goals.

The key to a good budget is being realistic; there is no point writing down that you don’t spend anything on entertainment when you actually have four subscriptions to streaming services. It’s perfectly acceptable to admit that you have subscriptions and any changes made to help budgeting may be something like reducing this to three services instead.



Retirement may be the last thing on your mind in your 20s when you’re starting off your career, but the earlier you start, the more years you have got to contribute and benefit from compound growth. In simple terms, the earlier retirement planning is started, the more powerful it can be.


Financial Protection

As you start a career and take on more responsibilities in your 20s, it is a good time to start to think about financial protection, as doing nothing could result in significant financial hardship at pinch points in the future.

Financial planning in your 20s - young woman discusses financial protection

This has been starkly illustrated by the 7 Families initiative, a charity-led campaign to raise public awareness of the financial impact of long-term illness or disability, which changed the lives of seven families who did not have any financial protection in place but needed it.

Considerations toward financial protection can be the difference between a health issue being a bump in the road or a complete car crash, showing the huge benefits of financial planning in your 20s.


Financial Advice

The best way to approach financial advice in this age group is to talk to a professional about your situation and be honest with them and yourself. It doesn’t matter if you don’t know all the answers or even the questions, ask someone and they will help!


Take control of your financial future – Financial planning in your 20s

Our latest report, examines the importance of starting your financial journey early and the key financial considerations for different life stages.

No matter your age, find out how you could protect your financial future below:

Download: Changing Landscapes- Retirement is not just for the old


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