Career & Side Hustle Coaching For High Achievers

How To Start Financial Planning In Your Twenties

Here’s the secret to financial planning: there is no one “right financial plan.”

Everyone’s life goals will look different. However, just because it’s not a “one-size fits all” model with one perfect model, doesn’t mean it’s not important. It just means that you may need to take some time to figure out what is important to you. However, there are 4 basic hallmarks of financial planning that apply to everyone and that’s what we are going to cover today! The four pieces of financial planning that everyone, no matter what you what your life choices are what type of lifestyle you desire are:

  • Paying down debt (that includes student loans, credit card/consumer, business loans, car, mortgage).
  • Saving for emergencies and to create your lifestyle
  • Investing for the future
  • Preparing for retirement

No matter what you where you go in life, there are the four areas that you need to focus on. And even if not all the areas of debt apply to you (and I do count mortgage as one if you purchase a home), you still need to consider how it affects your future overall.

But where do you start?

In this article, I will be outlining the areas that you need to focus on in the early parts of your life and why it is crucial to focus on paying down high-interest debt and investing in higher/long term portfolios at the beginning of your life and then focus on paying down low interest and transferring to lower-risk investments towards retirement. One of the key themes of this article will be leveraging, balancing, and using interest rates to your advantage at every stage of your life. To learn more about that, check out the last MLA article about how to use interest rates to save and invest your money.

Does this method work for everyone? Absolutely not. MLA is created for millennials seeking to develop the personal growth habits to make and manage their money to create work-life balance.

There are lots of people that pursue FIRE (Financially Independent Retire Early) and aim to retire by 40; their financial plan will look a lot different.

There are lots of people that want to save every single penny, every step of the way; their financial plan will look a lot different.

There are lots of people that live YOLO and spend every penny because they don’t know what tomorrow will bring; their financial plan will look a lot different.

These are the steps to make a financial plan to create a life of balance. This article will focus mostly on financial planning in your twenties and how to create the foundations for financial planning later in life. It balances planning without moving into the scarcity money mindset. When it comes to this type of financial planning, it’s important to remember that as you move into adulthood, you need to be prepared, but also live with an abundance mindset that money is a tool and it’s not something that you can never make more of or feel like “you never have enough”. So with all that being said, let’s get started!

Financial Planning In Your Twenties

I believe that your twenties are still a time of discovery. If you know exactly what you want to do in life, that’s great! But if you don’t, it’s okay to try different things and to find your way. The most important part of your twenties is not to accumulate so much debt that you will put yourself in a situation that constrains your finances for the rest of your life. So when it comes to your twenties, it’s really important to balance the interest rates of your debt and savings.


a) Paying off debt

In your twenties, you will most likely be just graduating from school and probably have student loan debt. I was really lucky that I graduated with zero debt thanks to scholarships, bursaries, and part-time jobs, but there are over 44 million Americans that carry outstanding student loan debt. Whether or not your education is paid for, it’s important to start paying off all interest debt such as consumer debt. 


b) Invest in your career and education

I really don’t hear this advice given a lot, because I think we’ve all been scarred by the massive student loan crisis that millennials, in particular, have had to endure but it’s important to look ahead and how you can progress and move ahead. Look at your income in your twenties and think about how you can increase it in your thirties and forties. This may mean going for a Master’s degree, taking an extra course or certificate/diploma program, or it could mean starting your own side business. Whatever you choose, start investing in the earning potential of your future self either by saving for further education or investing in business expenses (such as a camera for a side photography business). 


c) Open up a retirement account

If you want to retire well and early, you should just start as soon as possible right? Wrong (sort-of). I know it goes against the conventional advice of just saving as much as retirement as you can, but my argument for not saving everything for retirement is based on one sole philosophy: I hate to pay interest on anything. So as we’ve talked about, it’s important to put the majority of your resources into consumer debt (that includes credit card interest of up to 20%) or student loan debt that can average 5 -10%. Most retirement funds (especially in Canada right now) are not super high paying at maybe at 2% so your money will go further paying down debt.


d) Start saving for an emergency fund & short-term goals

 An emergency fund is so important for your twenties because if anything were to happen, it can be devastating to your financial life for years. A $1000 or $2000 emergency may not seem like a big deal, but if you have to continually put these amounts on a credit card, the interest and balance can grow fast. So it’s important to put aside some money for an emergency fund (usually 3 – 6 months of your income). Lastly, I also think it’s important to spend meaningfully in your twenties and not be tied to saving every single penny you’ve ever earned. After you pay off debt, start investing in your career/education and start to contribute to a retirement fund, it’s okay to spend money on things you enjoy like travelling, a wedding, or down-payment. The only thing you need to be wary of is that these purchases bring meaning and joy into your life, but enjoy your twenties. 

That being said, it’s important to think about retirement and start opening the accounts now to contribute whatever you can. Also, it’s very important to max it out if you’re employer has a match program. You don’t have to put every last penny into retirement (it’s okay to spend money to enjoy your twenties too), but keep it in balance in your portfolio. 



In your twenties, it can be easy to fall into the extremes of “I don’t know what I’m doing so I’m just not going to think about” or be overwhelmed by the process of financial planning and want to save or invest every penny you have, but the most important thing is to get started.

If you need some help budgeting make sure you check out my free budget template here. (It uses the 50/30/20 budgeting system and is super easy to get started).

And if you’re looking to boost your income and get started in a new career, make sure you check out the MLA shop for resume templates and your free workbook.

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