How to Set a Strong Financial Foundation in Your 20s and 30s
YouNearly half of millennials say they’re living paycheck to paycheck and only 28% say they are prepared for the unexpected, according to a new survey from the Aging Well Hub at Georgetown University’s Business for Impact, in partnership with Bank of America.
Millennials also say they spend an average of $478 a month on “nonessential” purchases, such as dining out, entertainment, luxury items and vacations. According to Bank of America, of those with debt, 16% say they owe $50,000 or more. Experian reports that the average millennial has over $4,000 in credit card debt.
Click here for full presentation: How to Set a Strong Financial Foundation in Your 20s and 30s (PDF)
Presentation Summary
If you’re in your 20s or 30s, now is the time to set the financial habits that will shape your future. Whether you’re starting your first job, paying off student loans, or saving for a home, building a solid financial foundation today pays off for decades to come. Here’s how to do it—step by step.
Step 1: Know Where Your Money Goes
It’s shocking how quickly money disappears if you’re not paying attention. According to Georgetown University’s Aging Well Hub and Bank of America, nearly half of millennials live paycheck to paycheck. Even more concerning—millennials spend about $478/month on nonessential items like dining out and entertainment.
To take control, start tracking your spending with a personal budget. Tools like Mint, YNAB, or Every Dollar can help. You can also request a cash flow template from Main Street Advisors to break down income and expenses.
Step 2: Measure Your Net Worth
Think of net worth as your financial scoreboard. It’s calculated by subtracting what you owe (debts) from what you own (assets). Tracking it year after year helps you see if you’re making progress.
Tip: Use a net worth template to record and update your financial snapshot annually.
Step 3: Follow the Right Financial Milestones for Your Age
If You’re In Your 20s…
- Build an emergency fund (at least 3 months of expenses)
- Contribute to a 401(k) or IRA—even a small amount adds up
- Pay down credit card and student loan debt
- Use the 50/30/20 rule for budgeting
- Consider renter’s insurance—it’s only about $15/month
In Your 30s
- Eliminate high-interest debt
- Save 15% of your paycheck for retirement
- Have at least 1x your annual salary saved
- Open a will and start an investment portfolio (beyond retirement accounts)
In Your 40s
- Focus on saving for your child’s college, ideally through a 529 plan
- Have 2–3x your annual income saved for retirement
- Consider a Roth IRA and taxable investment accounts for early retirement
- Avoid lifestyle inflation as income grows
Step 4: Use a Checklist to Stay on Track
The guide also includes a Millennial Financial Checklist:
- Review your insurance coverage
- Create a financial plan and budget
- Track your net worth yearly
- Invest in retirement accounts
- Establish a will and power of attorney
Step 5: Get Expert Support with MoneyGuidePro®
Main Street Advisors uses MoneyGuidePro®, a leading financial planning tool, to help clients visualize their goals—like retirement, college planning, or debt reduction. This software lets you see how today’s decisions shape your future and allows for scenario planning tailored to your needs.
Start Building Your Financial Foundation Today
Getting started with financial planning in your 20s and 30s isn’t just smart—it’s life-changing. Small steps now can lead to big gains later. Whether it’s opening your first IRA or building a realistic budget, today’s habits are tomorrow’s wealth.
📞 Ready to take control of your finances?
Contact Main Street Advisors, LLC at 410-840-9200 or email CFP@mainstadvisors.com to get personalized guidance.
