Money Habits to Start in Your 20s or 30s: Start Building Wealth Now!

They say, “Money can’t buy happiness,” but let’s be honest – it can buy a lot of things that bring happiness, like vacations, a cosy home, and maybe even the occasional avocado toast without guilt.

Money habits are the small, everyday actions that add up over time to make a big difference in your financial future. Starting smart money habits in your 20s or 30s can set you up to live a more financially secure (and stress-free!) life.

Let’s dive into some of the best money habits to get into while you’re still young enough to laugh at the idea of “retirement funds” – or, even better, start one.

Contents
Master Budgeting: Your Money Habits Starting Point

Budgeting may sound like a boring chore, but it’s basically a road map for where you want your money to go. No one likes surprises at the end of the month when the bank balance says, “Nice try.” One of the best money habits is to create a realistic budget that accounts for all your expenses, savings goals, and the occasional splurge.

Tip: Use apps that make budgeting as easy as scrolling through Instagram. There’s Mint, YNAB (You Need A Budget), and a bunch more that can show you exactly where your money is going.
Why it works: Budgeting helps you control your money rather than letting it control you. Plus, it’s pretty satisfying to know that every dollar has a job.

Start an Emergency Fund – Before You Need It

Life has a habit of throwing curveballs – sometimes it’s car repairs, sometimes it’s surprise medical bills. That’s why an emergency fund is one of the most essential money habits to develop. Aim to save three to six months’ worth of living expenses, and keep it somewhere easily accessible, like a high-yield savings account.

Tip: Automate a small amount from every paycheck to go directly into your emergency fund. It’s one of those money habits you’ll thank yourself for later.
Why it works: Knowing you have a cushion for unexpected expenses brings peace of mind, which is worth every penny.

Embrace the Magic of Compound Interest with Investments

Putting your money to work through investments is a game-changing money habit, especially if you start early. The power of compound interest means that even small amounts can grow significantly over time. Think of it as planting a money tree that just needs a bit of water (investments) and patience to flourish.

Tip: If you’re a beginner, try index funds or ETFs – they’re like the ‘all you can eat’ buffet of the stock market, offering diversification without you having to pick each individual stock.
Why it works: Investments give your money a chance to grow instead of just sitting in your checking account. Plus, who doesn’t love earning money while they sleep?

Get Comfortable with Saying ‘No’ – It’s a Money Habit Too!

FOMO is real, but your future self will thank you for learning to say “no” now. Not every event, trip, or fancy dinner needs your attendance (or your wallet’s participation). Building good money habits means sometimes choosing long-term stability over short-term fun. And remember, sometimes Netflix is the party.

Tip: Try a 24-hour rule for any big impulse purchases – if you still want it tomorrow, go for it. If not, you just saved yourself a chunk of change.
Why it works: You’re curbing impulse spending and giving yourself more control over your finances, which is worth a lot in the long run.

Credit Score: Know It, Love It, Improve It

Your credit score isn’t just a random number – it’s like a report card for adults. A good credit score can save you thousands of dollars in interest over your lifetime and make it easier to get a mortgage, car loan, or even rent an apartment. Start practising money habits that help build and maintain a good credit score.

Tip: Pay off your credit cards on time and try to keep your credit utilisation under 30%.
Why it works: Building good credit is like a fast-pass for life’s major expenses, allowing you to access better interest rates and save money in the long haul.

Automate Savings – One of the Easiest Money Habits to Stick To

Saving shouldn’t feel like pulling teeth. One of the simplest money habits to develop is automating your savings so that a portion of your income goes directly into your savings account each month. Set it, forget it, and watch your money grow over time without the stress of remembering to transfer funds yourself.

Tip: Set up a separate savings account for specific goals like travel, a down payment, or that emergency fund we talked about.
Why it works: Automation takes the pressure off, and you’ll find that you won’t even miss the money that’s tucked away for your future.

Educate Yourself About Personal Finance

It’s tempting to skip over personal finance knowledge, but understanding the basics can change your relationship with money. The best money habit you can develop is to keep learning – whether that’s reading books, listening to finance podcasts, or following credible finance influencers.

Tip: Start with “The Psychology of Money” by Morgan Housel or a podcast like BiggerPockets Money to get a solid grounding in personal finance.
Why it works: Knowledge is power. Knowing how to manage your money lets you make informed decisions and gives you confidence in your financial journey.

Why Building Good Money Habits Now Matters

The sooner you start, the better you’ll feel about your financial future. Building solid money habits in your 20s or 30s can save you a ton of stress later on. And as your habits get stronger, so will your bank account—and let’s be honest, who doesn’t love that?

Wrap Up: Start Building Wealth with Wizdom

Ready to turn these money habits into action? Check out the Wizdom app! Wizdom helps you get expert summaries of the best finance and personal development books so you can learn money habits and strategies from the experts – all in minutes. It’s like having a financial coach in your pocket, so you can build the money habits you need without digging through dense books. With Wizdom, taking control of your finances has never been easier!