Budgeting, Money

The Three Major Money Categories | Managing Money In Your Twenties

The road to wealth isn’t always the easiest to navigate. Especially when you’re just learning the ropes of the money world. No one warned us how hard finances would be once we were out on our own in our twenties.

The truth is that there are soooooo many different ways to use your money. And sometimes they can seem like they’re in a constant battle against each other!

Something not a lot of us twenty somethings no much about is investing your money. We’ve all heard our parents say “You need to save up if you want to buy something” or “It’s not my fault you don’t have enough money, you should’ve budgeted better”.

But at such a young age there really isn’t much talk about the investing side of money, or the various things you can do when it comes to budgeting or saving.

I’m going to give you a run down of the three categories your money can fall into, and how you can be successful in each one.

Disclosure: This post contains affiliate links. Which means at no extra cost to you, I will be compensated when you use my links. You can read more about our disclosure here.


Budgeting ( A.K.A. Your Security)

First we need to cover the most important step by far, budgeting!  Budgeting is all about looking at your income and making sure you have enough to cover your monthly expenses. 

In other words, making sure you are secure with your current income. This kind of becomes a monthly game to find opportunities to cut down on expenses and increase your savings.

Not to mention seeing how much money you can put aside for yourself. Each month, make your budget, find what you can spare, and pay yourself just like you would pay a bill. Pretend that you’re one of your bills. Make it a habit of putting $20, $50, $100, whatever you can away for yourself.

The money you set aside can be used for lots of different things depending on your situation. You could pay down student loan debt, buy insurance, or start saving up for future large purchases like a home or new car.

Paying yourself is SO important because after all your bills have been paid, you want to make sure you still have a little money left in the bank.

Want to learn even more about budgeting? – How To Budget In Your Twenties

Savings (A.K.A Your Safety)

The next step is safety! Saving your money is great for two reasons.

  1. Ensuring that you have money in the bank in case of an emergency or you want to make a large purchase
  2. Having a way of growing your savings without having to risk losing it

Now the word grow can mean a lot of different things. Not every savings account is created equally! The interest rates will vary from account to account. In other words, how much money the bank is paying you to keep your money in that account will differ.

You need to think about how long you’re going to keep your money in savings and find the best savings account to ensure you’re getting the most growth.

BUT that being said growth shouldn’t necessarily be the most important thing when it comes to saving your money.

Your main priority should still be the purpose of your money. Are you saving up for a new laptop? Adding to your emergency fund? Creating a savings just in case of job loss?

It’s great that you can actually increase your savings just by having it in an account, but don’t lose sight of what that money is intended for.

Want To Learn Even More About Saving? – The Best Money Saving Apps


Once you’ve got yourself all safe and secure, then you can look into investing whatever else you can afford to! There are plenty of different markets to invest in. Some of them are even great for those with smaller amounts of money to invest.

The secrets to success stay the same regardless of the market.

The first step is insight.

Do your research! Look for all the signs of growth, whether it’s looking at buying a property in up-and-coming areas or investing in growing industries to see the kind of growth that investors saw in First Solar stock.

The second step is diversity.

Now I know we’ve all probably heard this phrase a million times, don’t put all your eggs in one basket! Don’t invest all your money in one stock, bond, currency, property, or asset.

Invest different amounts of your money in completely different markets. That way, if a downturn affects one of your investments, at least the others are safe and sound.

Choose The Strategy That’s Best For You

Everyone’s situation is different so there really isn’t a universal “right” way to manage your money in your twenties. You may be in a place where you really need to focus on saving for a new car. Or maybe you have some extra cash to start investing with.

No matter where you are in life, YOU have the final decision when it comes to your money.

If you need to perfect your budget, gather up all your expenses and tackle it like a boss. If you need to increase savings, find new places to cut out expenses. If you want to invest, diversify where all your money is going.

As long as you’re doing whats best for YOU, you really can’t go wrong.

Good Luck!

Need More Help Managing Money In Your Twenties?

How do you save money when you're broke and young? I've got some tips to share! If you have no idea what credit is you are not alone! I'm going to teach you everything I know to get you prepared for the adult world.




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