| ||||||||||||
You’ve launched your career, moved out on your own, and you pay your bills on time. You’re adulting!
As the future unfolds before you, however, just remember that the choices you make today may influence your long-term financial position.
Indeed, your 20s and early 30s represent a rare opportunity to capitalize on an important factor in personal finance: time.
“Time is one of the few advantages you can never get back,” said Christina Zoppi, a financial professional with MassMutual New Jersey—NYC in Warren, New Jersey. “The goal isn't perfection; it's building good habits early and letting time do the heavy lifting.”
With that in mind, we asked MassMutual financial professionals for a list of life hacks that young adults should consider to help them establish a foundation for their financial future . Here’s what they said:
- Take the better job, not the bigger paycheck.
- Build your professional network.
- Harness the power of compound growth.
- Automate your retirement savings.
- Attain financial literacy.
- Secure your credit score.
- Keep debt to a minimum.
Take the better job, not the bigger paycheck
In the face of new financial obligations, which may include student loan debt, car payments, rent, and a professional wardrobe, it’s tempting to take the job with the biggest paycheck. But think bigger.
You can potentially accelerate your earnings growth and boost your long-term job satisfaction by choosing an employer that offers the best opportunities for career development, even if it comes with a smaller starting salary.
Look for companies that promote continuous learning, emphasize upskilling, and offer clear promotion tracks.
McKinsey Global Institute research suggests that time spent early in a career in a positive workplace setting that emphasizes learning is the best predictor of whether employees eventually propel themselves into a higher lifetime earnings bracket relative to their starting point.1
If your employer doesn’t offer training opportunities, take the initiative and register for certifications and classes independently that will position you for future leadership roles.
“Early in your career, your earning potential is usually driven more by the skills you develop and the opportunities you create than by squeezing out a slightly higher starting salary,” said Zoppi. “Investing in yourself through education, certifications, or skill development can often provide some of the highest returns at this stage.”
Connect with a MassMutual financial professional
Build your professional network
In the early years of your career, the importance of building your professional network cannot be overstated.
Take the time to develop relationships with teammates, managers, and mentors who will help cultivate your potential and open doors throughout your career.
According to the Gallup research group, only 40 percent of employees report having a mentor in the workplace. But those who do tend to have a more positive employee experience and are twice as likely to be engaged.2 (Related: Financial checklist for your first job)
In the age of telecommuting, it bears noting that while work-from-home gigs are highly coveted by young professionals, they’re no substitute for face time with the boss. Collaborative team projects are the crucible where problem-solving skills are forged. And conference rooms provide an invaluable opportunity to observe firsthand those critical soft skills you’ll need to succeed, such as interpersonal communication, negotiating tactics, and professional conduct.
“Everything I’ve learned throughout my career is from other advisors who I only crossed paths with because I show up to the office every day,” said Mitchell Mass, a financial professional with ClearView Financial Solutions in New York City. “They gave me their time and advice, and if I had never come in, I probably wouldn’t have even known their names, let alone gained insight into what helped them succeed.”
Harness the power of compound growth
In the early days of your career, it’s not about how much you save. It’s about establishing healthy habits.
While financial professionals generally suggest saving from 10 percent to 15 percent of your income for retirement every year, it’s OK to start smaller. Try saving 5 percent of your salary and commit to increasing your contribution by 1 percent per year with every raise until you reach your goal.
The important thing is to get started today. The sooner you begin saving, the more you could potentially benefit from compound growth.
Compound growth describes the process of earning interest on both the money you invested (your principal) and the interest you already earned. Over time, compound interest can contribute to portfolio growth, which may help you reach your financial goals over time. (Learn more: Saving for retirement in your 20s. Doing the math)
As an example:
- If you start saving $500 per month at age 22 and achieve an average annualized return of 8 percent, you will have amassed a nest egg of $2.3 million by age 67.
- By waiting until age 27 to begin saving, your nest egg would be worth roughly $1.6 million at age 67, all else being equal.
- And those who wait until age 32 to begin saving would end up with about $1 million by age 67, all else being equal.
Of course, retirement may not be your only savings objective. You might also need to set money aside for short- and mid-term goals, such as buying a car, paying off student loans, or scraping together a down payment on a house. For short-term savings needs, a money market account or high-yield savings account may offer a combination of interest earnings and liquidity.
“Retirement accounts may be a useful savings vehicle depending on individual circumstances,” said Zoppi. “However, many people forget to build a liquid bucket of savings and investments and then in their 30s and 40s they struggle because their net worth is tied up in their 401(k) and home. Make a plan early on so compound interest can take place in your short-, mid-, and long-term buckets.”
Automate your retirement savings
By putting your savings on autopilot, you can consistently contribute toward your savings goals with every paycheck.
If your employer offers a 401(k), set up automated payroll deductions so that your contribution comes out of your paycheck before you even see it. If you’re funding an IRA on your own, same rule. Arrange to have your contributions automated. (Learn more: Retirement plan contribution limits: Your need-to-know)
When you pay yourself first, you’ll never miss it.
According to IRS guidelines:
- You can contribute up to $24,500 in tax year 2026 to a 401(k), 457(b), or 403(b) plan. (Those people aged 50 or older by the end of the calendar year, however, may be eligible to make additional catch-up contributions of up to $8,000 in 2026, bringing the total contribution on a pretax basis to $32,500. Under a change made in recent legislation, employees aged 60 to 63 who participate in these plans can make higher annual catch-up contributions of up to $11,250 to a workplace plan in 2026.)
- The maximum yearly contribution to traditional and Roth IRAs is $7,500 for tax year 2026. The IRA catch‑up contribution limit for individuals aged 50 and older is $1,100 in 2026.
Attain financial literacy
Mass said young people should also make it a point to become financially literate, demystifying some of the most basic financial concepts including compound growth, dollar-cost averaging, asset allocation, and the effect of interest rates on both borrowers and savers.3 (Learn more: How interest rates work and their impact on your money)
You can begin your education by soliciting advice from your elders, who no doubt have wisdom to impart about sound financial decisions they have made and mistakes to avoid.
“Have an open dialogue with a parent or mentor about money,” said Mass. “Identify good habits that you can maintain and get comfortable and confident in making financial decisions.”
Next, he said, think carefully about your values and define your expectations for the future:
- What does money mean to me?
- How does what I believe about money affect the way I live my life?
- Am I living the life I want to live now?
- What are my ultimate career goals?
- What do I want my life to look like in five, 10, 20, or 40 years?
“In my experience, those who have clarity on where they are headed are most consistent and dedicated to their career and money habits,” said Mass.
Secure your credit score
Your credit score matters. A lot.
Banks use credit scores to determine what interest rate to charge you on everything from car loans to credit cards. A lower interest rate can make it cheaper to borrow money, which puts wealth-building opportunities within reach — like homeownership and small-business loans. (Learn more: Improving your credit score: It pays off)
Your credit score is also an important yardstick that employers may use to gauge your trustworthiness and readiness for positions of responsibility, particularly important for jobs that involve sensitive data. It’s important to note that employers can’t see your actual credit score. They would only have access to a modified report that includes your payment history, outstanding debts, accounts in collections, and any bankruptcies you may have had.
Strategies to help maintain a solid credit profile:
- Pay your bills on time.
- Minimize your outstanding debt.
- Limit new credit inquiries.
- Keep any balance you owe to 30 percent of your credit limit.
Keep debt to a minimum
Debt is an insidious thief. It can rob you of forward momentum, costs you more in the long run due to interest payments, and potentially dings your credit score if your debt relative to your income is too high.
“This has become the biggest issue for young professionals, and the fault is not solely on the individuals who are over-leveraging their credit cards,” said Mass. “The credit limits being made available are astronomical. I have friends who make no more than $75,000 with a $25,000 credit limit. This is an absolute recipe for disaster.”
The ideal debt-to-income ratio varies depending on your unique financial picture, but most lenders like to see a ratio of anywhere from 28 percent to 36 percent. Keep in mind that that is based on gross income and does not include expenses such as childcare, health care, groceries, or utilities.
That said, it is also important to distinguish between good debt and bad debt.
- Good debt may include loans used to support goals like education or purchasing a home.
- Bad debt typically consists of high-interest credit cards and other types of retail loans or credit plans. (Related: What is considered good debt vs. bad debt?)
According to Mass, young adults should never hold more than two credit cards. And they should make certain that their total available credit is below their monthly after-tax income. Other tips he provides:
- Call your credit card companies and ask them to lower your limits as needed
- Pay your credit cards off monthly. Better yet, pay them off with every paycheck, or even weekly. “If you don’t have enough money to do this, you are probably spending too much,” he said.
Conclusion
Your 20s and early 30s are an exciting time, filled with possibility. Establishing sound saving and investing habits early can help you work toward your financial goals and potentially reduce financial stress over time.
A financial professional can offer valuable guidance as your income, lifestyle, and objectives evolve.
________________________________________
Frequently asked questions about financial life hacks for young adults
Q: What are the most important financial life hacks young adults should consider?
A: Taking jobs that help advance your career , automating retirement contributions, keeping credit card balances below 30 percent of your limit, starting to invest as early as possible, and living within a written budget that balances saving with spending on things you value. The earlier you put these habits in place, the more powerful they become — because time is your greatest financial advantage.
Q: How much should a young adult save each month?
A: Financial professionals generally suggest saving from 10 percent to 15 percent of your annual income for retirement, plus a separate amount for short- and mid-term goals such as an emergency fund, a car, or a down payment on a home. If that feels out of reach right now, consider starting with 5 percent and commit to increasing it by 1 percent every year. The goal isn’t perfection; it’s consistency.
Q: How do I build credit as a young adult?
A. Strategies to build a strong credit score as a young adult include paying every bill on time, keeping your credit card balance below 30 percent of your credit limit, avoiding opening multiple new accounts in a short period, and limiting yourself to two credit cards. Gen Z consumers (ages 18–29) experienced the largest average FICO® Score decrease of any age group in 2025, due primarily to student loan delinquency and rising use of credit.4 Protecting your score now directly affects the interest rate you’ll pay on a car loan, mortgage, or business loan in the future.
Discover more from MassMutual…
Why it’s important to start saving early for retirement
7 things financial planning does for you
Need a financial professional? Find one here
1 McKinsey Global Institute, “Performance through people,” February 2023.
2 Gallup, “Mentors and Sponsors Make the Difference,” April 13, 2023.
3 Asset allocation does not guarantee a profit or protect against loss in declining markets. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio or that diversification among asset classes will reduce risk.
4 FICO, “FICO Releases Inaugural FICO® Score Credit Insights Report Highlighting Major Shifts in Consumer Credit,” Sept. 16, 2025.
