Your 20s might not feel like the time to worry about money—you're supposed to be having fun! But the financial habits you build now will either set you free or trap you for decades. Here's what actually matters.
Why Your 20s Matter Most
- Compound interest: Time is your biggest advantage
- Habit formation: Build good patterns while income is lower-stakes
- Fewer obligations: Before mortgage, kids, etc.
- Mistakes are cheaper: £1,000 error now < £10,000 error at 40
ℹ️ The Power of Early Saving
Save £100/month from age 22-32 (£12,000 total) and it grows to more than £100/month from age 32-62 (£36,000 total). Start early!
Financial Priorities in Your 20s
- Learn to budget: Know where your money goes
- Avoid/minimize bad debt: Credit cards, consumer loans
- Build an emergency fund: £1,000 minimum, then 3 months
- Start pension contributions: At least get employer match
- Build your income: Invest in skills and career
Common 20s Money Mistakes
- "I'll save later": Later never comes; start now
- Lifestyle inflation: Spending every raise
- Credit card debt: High interest destroys wealth
- Ignoring pension: Missing free employer match money
- No budget: Money just "disappears"
- Keeping up with friends: Their finances might be worse than yours
Start Your Budget Journey
Build good money habits with iBudget's simple tracking.
The 20s Budget Framework
A simple starting point:
- 50% needs: Rent, bills, food, transport
- 30% wants: Fun, dining out, hobbies
- 20% future: Savings, pension, debt payoff
Adjust as needed, but protect that 20% for your future self.
Student Loan Reality
UK student loans are different:
- Payments based on income, not balance
- Written off after 30-40 years
- Usually don't prioritize extra payments
- Focus on other financial goals first
Skills to Build
- Basic budgeting and expense tracking
- Understanding compound interest
- Credit score basics
- Tax basics (especially if self-employed)
- Investment fundamentals
About iBudget
iBudget helps couples and families take control of their finances with simple, collaborative budgeting tools. Track spending, set goals, and build wealth together.
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