How to Save More Money in Your 20s

1. Create a Budget and Stick to It

If you don't already follow a budget, now's a good time to make one. A realistic budget helps keep your spending in check by accounting for every dollar you earn and spend.

Having a budget also lets you spot areas you can cut costs in, which helps you more easily achieve savings goals. Those goals could include things like building an emergency fund, saving for retirement or setting aside funds for a down payment on a new home.

It's easy to make a budget, and there are many strategies to choose from, as well as handy budgeting apps that can help. Before you pick a budgeting plan, take note of the basics, including your monthly income, expenses and financial goals. Once your budget is set, make sure to check in on your spending regularly. If you find that you're overspending, consider living more frugally to get your expenses under control and put more toward savings. You might also have to adjust your budget if you find that your spending goals are unrealistic.

2. Save on Housing

Housing is often the largest monthly expense in a person's budget, but it's possible to live well in your 20s without spending a fortune. Avoiding a high-end apartment, for example, can keep you from stretching your budget too thin.

You can also consider:

• Splitting housing costs with a roommate (or several)
• Moving in with family members
• Signing your next lease in the winter, when demand is lower
• Negotiating discounted rent in exchange for a longer lease
• Shopping for properties that are running specials or discounts

In general, you should stick to the 30% rule, which suggests that you spend 30% or less of your gross monthly income on housing. So if you earn $4,000 per month before taxes, your rent payment should not exceed $1,200. Alternatively, the 50/30/20 rule would have you spend no more than 50% of your budget on necessities, including rent, food and utilities.

Learn more: Ways to Reduce Expenses

3. Don't Overspend on Transportation

Transportation costs have been rising steadily for years, according to government data. Not only have car prices jumped, but insurance and maintenance costs have risen too.

One way you can save cash is by choosing your vehicle carefully. If you're on the market for a car, avoid pricey luxury vehicles and stick to more affordable brands. According to February 2026 data from Kelley Blue Book and Cox Automotive, you can save over $30,000 just by choosing a Honda, Mazda or Hyundai over brands like BMW or Mercedes-Benz.

If you live in an area where you can get around using public transportation, try doing that for some of your outings or, if possible, forgoing a car altogether. This could save you on gas, maintenance costs, parking and a monthly car payment, freeing up significantly more money to put into savings.

Learn more: Ways to Reduce Your Car Expenses Now

4. Find an Extra Source of Income

One smart way to save more cash is to simply make more of it. This could mean asking for a raise at work, taking on more hours or putting in for a promotion. You can also consider taking on a side gig or second job.

Some ideas include:

• Using your talents to freelance
• Offering tutoring services
• Driving for a ridesharing service or delivery app
• Taking on jobs through sites like TaskRabbit or Thumbtack
• Selling items you no longer need on Facebook Marketplace or Craigslist
• Putting your extra room, parking space or storage space up for rent

You might also benefit from passive income, which is income earned without actively working. Passive income might come from an investment account or the cash back rewards your credit card earns you while you shop. Other passive income streams, including affiliate marketing, rental properties and digital products, may take some time and skill to get up and running or require a more considerable investment.

Learn more: Ways to Make Extra Money from Home

5. Think About Retirement and Investing

Retirement may seem far off, but your 20s are a great time to start contributing to a retirement account. The earlier you start making contributions, the more time you'll give your money to grow, and the more you'll ultimately have in your account by the time you leave the workforce.

Try to contribute at least 10% to 15% of your pretax income to a retirement account. If your employer offers a 401(k) and matches contributions, contribute at least the percentage they agree to match to avoid leaving free money on the table. Traditional and Roth IRAs are good alternatives if your employer doesn't offer a 401(k).

There are several ways to invest your money in your 20s and get a head start on building savings, for retirement or other goals. Options include stocks, bonds, mutual funds, exchange-traded funds (ETFs) and real estate investment trusts (REITs). The best option for you will depend on your financial situation, personal goals and risk tolerance. You can use an investment app or robo-advisor, which is an online automated investing service, to get started without spending a lot in fees.

Learn more: Pros and Cons of Using Investment Apps

6. Pay Off Debt to Save Money on Interest

If you have debts like student loans, credit cards or a car loan, money you could be putting in savings is instead going toward paying interest each month. This is especially true if you're only making the minimum payments on those debts.

Case in point: Say you owe $3,000 on a credit card with an 18% interest rate and a minimum monthly payment of $75. If you paid only your minimum payment, it would take 222 months to pay the card off, and you would ultimately pay $3,923 in interest. Or, if you have a 10-year, $20,000 student loan with a fixed interest rate of 5%, your monthly payment will be $212.13. Only paying the minimum each month will cost you $5,456 in interest over the loan term.

You can whittle down your loan balances faster—and reduce the interest you pay—by paying more than the minimum each month. Another option is to consolidate or refinance your loans into a lower-rate product, such as a personal loan. You should also consider enrolling in automatic payments to avoid late fees. Some lenders also offer a small discount for setting these up.

If you have credit card debt, you may be able to use a debt consolidation loan or balance transfer credit card to save on interest. Debt payoff strategies like the snowball and avalanche methods can also help.

Learn more: What's the Best Way to Pay Off Debt?

Frequently Asked Questions

Start Today to Make a Difference

Saving money in your 20s can be challenging, but any bit of progress now can help you achieve your goals later on. Create a budget, reduce your expenses, and if debt is holding you back, make a plan to start paying it off.

You can also improve your credit scores to better qualify for debt consolidation loans and balance transfer cards that could save you a bundle on interest, thus freeing up more cash to stow away. Sign up for free credit monitoring from Experian to see where your credit stands.