*Editor’s note: This year-long series about financial literacy is sponsored by PSECU.

Your 20s are an exciting time. You’ve recently entered the workforce. You may be engaged or welcoming your first child, and you likely have long-term goals you’ve started working toward in both your personal and professional lives. To achieve them, you need to get yourself on the right financial track.

Establishing smart, fiscally conservative habits, while still allowing yourself the occasional splurge, will set you up for a lifetime of financial health. Learn about successful money management in your 20s below to get off to a great start, and then read on for even more financial tips for 20-somethings.

Don’t Open a Lot of Credit Card Accounts

You should have at least one credit card you pay off regularly and can use in emergencies. But you may be tempted to open accounts wherever you want to buy something new — a couch at a furniture store, a snow blower at a home improvement store or a new suit at your favorite fashion outlet.

Resist this urge. Though the lure of 0% financing sounds attractive, you can damage your credit score if you owe too many creditors or can’t keep up with the payments, and this may hurt your chances of getting a loan when you go to make a large purchase, like a house.

Get Renters and Life Insurance

Too many young people never look past tomorrow. While the likelihood of having a fire at your property or dying at a young age may be low, these things can happen — and you or your family could regret the lack of foresight to get insurance. Ideally, you’ll never use insurance, but it’s worth having for the peace of mind and the protection it can offer if you do need it.

Start Saving for Retirement with Your First Job

Again, just because you’re young doesn’t mean you can put off saving for the future. Retirement may seem too far off to worry about right now, but the better prepared you are, the more comfortable you’ll be as it inevitably nears. Getting in the habit of putting away at least 2% or 3% of your salary makes this a pattern to follow for life. If your employer offers a match for your retirement savings, make sure you’re maximizing it. If they don’t, you may want to consider contributing even more on your own so that you don’t fall behind. If you’re not sure what to contribute, consider meeting with a trusted financial advisor to get on the right track.

Get in the Habit of Paying Yourself First

“Paying yourself” means putting a few dollars away each month to feed an emergency fund. Being young, you might feel invincible, but you’re not. You could face a major challenge such as losing your job, or a smaller one such as an unexpected car repair. Building a fund that can cover you for three to six months in the event of an emergency can soften the blow if the unexpected occurs. Make this nest egg a priority, just like paying your rent or utility bills.

Manage Your Own Finances, Even if You Get Married

If you rely on someone else to manage your finances at age 20, who’s to say you won’t still be doing this at age 40? You have to start at some point, and it’s best to take control of your own wallet to understand your financial situation. This applies even if you get married, too. One spouse should not be solely in charge of what you spend or making sure your bills get paid.  Balance this task equally and ensure you each have a voice in where your money goes. You’ll be better prepared for the future – and more fiscally fit.

Establish or Revise Your Budget

Your early 20s are an ideal time to set ground rules for your spending. During this stage in your life, you’re most likely making money and have more expenses than ever before. Good money management is developed through habits created early on in life.

Take time to analyze your finances. How much can you really afford to spend on food, clothing, and rent or mortgage payments? Create a plan that identifies your income and monthly expenses. If you need help sticking to your budget, only get out the cash you need for that week or month and keep track of how you’re spending it.

Build Up Your Credit

This is a critical time in your life to build your credit. In order to do so, consider these steps:

  • If you have student loans, pay at least the minimum payment on time, every time.
  • When you have extra money, put it toward outstanding loans to help you pay down debt.
  • If you don’t have any loans, you may want to consider applying for a cash rewards credit card, which can provide a smart way to earn money back on the items you buy regularly, like groceries. A cash back credit card is exactly what it sounds like. You get money back from your credit card company or financial institution on purchases. Generally, it’s a percentage of each purchase that’s returned to you in rewards. For example, those who have our Alumni Rewards Card receive 2%* or 1.5% cash back on every purchase.

For more money management tips, visit our WalletWorks page.

*You can earn 1.5% cash rewards on purchases. You can earn 2% cash rewards on purchases if you maintain a PSECU checking account and qualifying monthly direct deposit(s) of at least $500. See the Visa® Founder’s Card and Visa® Alumni Rewards Card Rewards Program Terms and Conditions for full details.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.

Sponsored by PSECU