3 Money Milestones To Hit In Your 20s!

The median salary for Americans in their 20s is right around $45,000. Now, that might not feel like a lot. Take your hat off, boy. That’s a dollar bill. But what if I told you that even with a relatively modest salary like this one, you could be well on your way to becoming a millionaire by hitting a few key milestones in your 20s?

We’re going to go over that and more, and at the end, we’re going to pull it all together to give you savings targets as you close out the decade. So, be sure to stick around, and your future self will thank you. Last but not least, I want to thank me.

Your 20s can feel overwhelming—figuring out your career, living independently, and navigating financial decisions for the first time. But it’s also the best possible decade to set yourself up for lifelong financial security. As someone who navigated this decade starting at zero, I promise the habits and choices you build now can profoundly impact your future. With that, let’s dive right in.

This first one might not feel like a real milestone, but it’s something so many folks get wrong in their 20s and beyond. Identifying your financial goals early on and locking in a plan for your money is your starting point. Just having a plan for your money turns dreams into future realities. Understanding your financial objectives creates a clear roadmap, helping you visualize exactly where you want to be in the future. You might be surprised by just how much this clarity can ease anxiety around money.

Why is this so critical? Because your expenses are typically lower in your 20s, especially compared to later decades when you might take on a mortgage, have larger living expenses, and face the cost of raising children. These relatively low expenses mean you have a golden opportunity to build strong financial habits without significant financial obligations tying up your money.

One great tool to help you focus and remove guesswork is the old reliable financial order of operations. It simplifies your financial decisions, telling you what to do with your next dollar. This structured approach lets you confidently tackle your goals step by step, freeing you from constant worry about whether you’re making the right moves. We’ll include a link below so you can check it out and start incorporating this valuable resource into your financial planning.

This next milestone is odd because it focuses on what you should not do. We’re talking about debt—specifically consumer debt. If there’s one milestone you absolutely must hit while you’re young, it’s eliminating consumer debt. Consumer debt, especially credit cards and auto loans, is perhaps the biggest obstacle to building wealth for young adults. Too many young people underestimate just how damaging this debt can be to their financial futures.

Take credit cards, for instance. The average credit card balance among Americans in their 20s is around $3,200. Now, this might not sound catastrophic initially, but the devil’s in the details, particularly the interest rates. Interest rates for credit cards typically hover around 20%, but it’s not uncommon for them to climb as high as 30%. With such high interest, minimum payments—usually around 2% of the balance, or roughly $60 per month on that average balance—barely chip away at the principal. Instead, nearly all the payment goes to interest alone. This debt digs you deeper and deeper into a hole, stealing your money and crushing your dreams of building wealth.

Wherever you are, you obviously enjoy being there more than spending time with me.

But credit cards aren’t the only culprit. Auto loans represent another significant form of consumer debt among young adults. On average, young adults carry approximately $20,000 in auto loans, often financed at rates around 7% or even higher. When you stretch this out over a 60-month repayment term or longer, monthly payments frequently range between $400 and $500. This substantial monthly financial commitment drastically limits the flexibility and resources available for saving, investing, or even enjoying life’s smaller pleasures. You are literally driving around in your wealth.

Avoiding or rapidly eliminating consumer debt is therefore critical. It ensures you’re not draining your wealth-building potential before it even starts. Eliminating consumer debt allows your financial resources to work towards building your future rather than paying for your past.

And the last one—the one that gets me really excited to steal from Bo, the one I love talking about to anyone in their 20s who will listen—is saving and investing. In your 20s, the world is yours to conquer. Just doing something and starting to save and invest is a huge financial milestone. You’re way ahead of the curve if you can get there, considering the average American currently doesn’t even begin saving or investing for retirement until their early 30s.

I get it. Saving money in your 20s can feel nearly impossible. You’ve got rent, you’ve got student loans, a social life, and even your entry-level salary can make savings seem daunting. But trust me—consistently saving even small amounts now can profoundly impact your financial future. The power of compounding interest means even small amounts saved consistently can lead to large sums later on. Because the real advantage in your 20s is time. You are literally a billionaire of time, and compound interest absolutely thrives on time.

Even seemingly small amounts invested consistently at this age can yield massive returns decades later. Imagine planting seeds today and watching them grow into towering trees, providing financial shade and security in your later years. That’s exactly how compound interest works—slowly at first, but then rapidly accumulating and snowballing into meaningful wealth.

To illustrate, let’s break down exactly what you need to save each month to retire a millionaire by age 65. So, at age 20, you’d only need to save around $95 per month. That’s incredibly manageable—roughly the cost of a few meals out or subscriptions. But delay saving until you’re 25, and now that amount nearly doubles to $184 per month. Wait even longer, maybe until age 30, and you’ll need to quadruple your initial savings effort, putting away about $340 a month.

This stark reality highlights just how vital your early 20s are for saving and investing. Every year delayed demands exponentially greater financial sacrifice to catch up. The essential point is simply to start today. It doesn’t matter if you’re only saving small amounts initially. What matters is establishing that habit and consistency early on. These early actions become deeply ingrained, setting a powerful financial foundation for life. And a little truly does go a long way.

Now, let’s apply these savings practices using some real data. This example is going to provide us with our final true financial milestone to close out your 20s—and that is aiming to have one times your annual income invested by the time you reach age 30. Now, I understand that this might sound intimidating or even impossible when you’re just beginning your financial journey, but the truth is this milestone is entirely achievable with basic financial discipline and strategic planning.

For example, let’s consider the median income for young adults in their 20s. Again, that’s roughly $45,000 a year according to Don’t Quit Your Day Job. If you’re consistently saving just 10% of that income—that’s $4,500 annually, or about $375 a month—at age 22, you’ll reach this milestone quite comfortably by the time you’re 28. And that’s assuming you don’t get a raise or ramp up your savings at all.

By hitting this milestone, you’re clearly demonstrating a commitment to living below your means, a crucial component for building genuine and lasting wealth. And if you’re wondering how income changes might impact this milestone of having that one times your income invested and you’re thinking, “Well, what if I have a volatile income or I just got a pay raise? Am I behind all of a sudden?”—don’t worry. What a lot of people will do in that case is average their last three years of income to give themselves a more normalized benchmark or milestone to shoot for.

And while you’re on the subject of raises, when you do get one, don’t let lifestyle creep kick in. Take some of that extra income and use it to ramp up and accelerate your savings. This will make the goal of increasing your savings and investments over time easier—instead of seeing a lofty aspirational goal and giving up.

Having one times your income invested shows you’ve moved beyond just paying the bills. You’re actively building real wealth. You’re successfully transitioning from simply getting by each month to working toward a financial future for yourself. This milestone also ensures you have meaningful resources that can compound and grow over later decades, accelerating your journey towards financial independence.

Your 20s are undeniably pivotal years for establishing lasting financial security. By clarifying your financial goals, avoiding or quickly eliminating consumer debt, and consistently saving even small amounts, you lay an incredible foundation for your future wealth.

If you feel overwhelmed, remember it’s not about perfection—it’s about consistent progress. Every single step, no matter how small, moves you closer to financial independence and security. So stay disciplined, avoid debt, save regularly, and invest wisely. You’re already on your way to a brighter financial future.

Be sure to like and subscribe if you learned something today. And as always, keep building your great big beautiful tomorrow. I’m your host, Brian. Money Guy out.