When you first start earning, paychecks are exciting.

There’s nothing like your salary hitting your bank account at the end of every month. Your studies and work have finally paid off. It’s easy to get carried away with spending, especially when you’re younger. The future seems far away and saving or preparing for a secure financial future just isn’t at the forefront of your mind.

However, setting financial goals for your 20s is recommended by personal finance experts. But these goals won’t restrict your lifestyle! They’re simply objectives to work towards as you further your career.

Do you know how to get ahead in your 20s? Scroll down to see the top UK personal finance tips for younger earners.

Don’t Forget Retirement

Saving for retirement isn’t everyone's first thought, but starting to generate savings while you're young is always a good idea.

If possible for your income, save a percentage of your money each month to harness the power of compound interest. Compound interest is interest calculated on the initial principal and the accumulated interest from the previous period.

Leave your investments and don’t touch them. They’ll blossom as you age thanks to “interest on interest”. You’ll be thankful you planted the seeds while young.

Work With A Budget

A secure financial future is often founded on a solid budget and consistent savings.

We often talk about budgets, but they’re so important that the point is worth repeating. A budget that tracks expenses, income and financial goals keeps you on track for a stable future. Learn how to track your monthly expenses today.

Slowly Build An Emergency Fund

Saving for retirement and budgeting is excellent. But what happens when you have a last-minute expense you didn’t plan for? This is where your emergency fund comes in.

An emergency fund is a pot of savings dedicated to unexpected expenses. With one of these, you won’t need to spend your personal savings when your car breaks down or you need a home repair.

Of course, you can’t build an emergency fund overnight. However, you can start allocating a small percentage of your income to one. Experts recommend having between 3 and 6 months of living expenses saved up. Integrate this goal into your budget and set a realistic monthly addition for your income.

Manage Debt

Finally, if you’ve taken advantage of credit cards or payday loans, you must start managing your debts. Like building savings, paying off debts won’t happen overnight. But slowly making payments is a critical financial goal for your 20s.

Start by addressing high-interest debt first, as this can quickly build up over time. Debt counselling is also on offer if you want professional advice.

If you’re considering loans or credit lines, always consider your ability to pay back the money on time and in full before proceeding with your application.

The Takeaway

Taking steps to a secure financial future should start early. But it doesn’t matter if you’ve put these off. The best time to start looking after your personal finances is today. No matter your age or financial situation, creating a budget, making savings goals and addressing debt will help you advance your financial security.

Want more UK personal finance tips? Explore the Cash Asap blog online here.