Last updated on October 22, 2026.
When you’re in your 20s, you’re likely juggling school, working through the imposter syndrome that often comes with a career, or Your 20s are one long series of figuring things out. You’re learning how to split bills with roommates, survive the cost of living, and likely go to school or start a new career.
Money is another learned skill. No one is born knowing how to budget. So, if you feel a little adrift when it comes to finances, you’re not behind. You’re just at the beginning.
You don’t need a huge salary to build a strong financial foundation, either. Workers aged 16– to 24 earn about $41,912 per year, which is less than every older age group. But while your income may be smaller, one great advantage is that time is on your side. You have decades to earn interest on every dollar, stack your savings, and make smart money moves.
In this blog, you’ll hear from Vancity and Aviso wealth planner, Jeanette Jow. She shares some life-and-money hacks on the subject of your finances.
Mistake 1: Setting vague goals.
“Save more money” is technically a financial goal. It’s just not a particularly useful one.
Jeanette recommends turning vague intentions into SMART goals:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
“SMART goals allow clarity and are a concise way to build out what younger people are saving for,” says Jeanette. “They allow for a focused approach to goal setting.”
Take buying a home, for example. Your big financial milestone here will be a down payment. So, you can figure out approximately how much you’ll need:
- 5% on the first $500,000 of the purchase price,
- 10% on the portion between $500,000 and $1,500,000, and
- 20% for homes priced at $1,500,000 or more.
Then, decide how much you can realistically put aside each month, and you’ll be able to map out how long it will take you to get there. Now, the goal of buying a home has a plan
Jeanette recently worked with a young member who did exactly that. They established the down payment they’d need, worked out a savings amount that fit their current finances, and set a five to six year timeline.
Your goals can be anything from homeownership to retirement to the more immediate ones, like a vacation or a car.
“If it’s travelling, then let’s save towards a travel fund,” says Jeanette. “If it’s leisure, then start a savings plan towards a Pilates membership. Saving doesn’t necessarily mean you can’t save for things that make you enjoy your life.”
Mistake 2: Not knowing where your money goes.
You don’t need to be maniacal about every single dollar you spend. But having an idea of what comes in, what goes out, and what’s left over will help you keep your finances on track toward your goals.
Jeanette says one of the first things she recommends is looking through your recent bank and credit card statements. Once you’ve done that, “go through your monthly spending and see which items are actually necessary. You might be surprised.”
Once you know what you’re working with, you can start organizing your money. Jeanette suggests thinking about it in three buckets:
- Money you need now for things like rent and bills,
- Money you’ll need in the next few years for bigger expenses, and
- Long-term savings.
Simran uses a similar approach with members.
“Generally, people do not have their money organized,” Jeanette says. “I like to divide my members’ money into buckets. Do they have enough in their emergency savings? Do they have enough to pay for expenses they may expect in one to five years? Do they have enough funds in their long-term savings?”
There’s no perfect ratio or system that works for everyone. As Jeanette puts it, “There is no right or wrong way to do this, as long as you actually start.”
Mistake 3: Thinking saving means saying to no to everything.
There is a version of financial advice that makes it sound like enjoying yourself is the main thing standing between you and unimaginable wealth. But the reality is that skipping a $30 brunch won’t net you a down payment on a condo.
The point of saving isn’t to strip your life of everything enjoyable, so that one day you might be able to afford a home. It’s to decide what you actually want your money to do for you.
That might mean spending less on things you don’t particularly care about, so you have more for the things you do. Or building a vacation fund because travelling matters to you. Or deciding that the expensive gym membership is worth it because you use it way more than the cheaper gym, and your mental health has drastically improved.
A budget isn’t there to tell you what you’re allowed to enjoy. It’s there to help you make room for it. One easy place to start is automating some savings before the rest of your paycheque gets absorbed by life.
“If someone only builds one financial habit this month, I’d recommend starting a preauthorized savings plan,” says Jeanette. “From every paycheque, start with automatically saving $50 toward your long-term savings goal.”
If $50 dollars doesn’t work for your budget, then pick another number. The habit matters more than hitting a certain amount. Jeanette agrees. “It doesn’t matter what the amount is. It could be as simple as setting up an automatic deposit on the day you get paid to be redirected into a tax-free savings account. Maybe it’s $25 a month, maybe it’s $50. It’s just important to start.”
Mistake 4: Waiting to think about credit.
Credit can feel like something you’re better off avoiding altogether. But if you think you might eventually want a car loan, a mortgage, or another form of financing, having a credit history matters.
Jeanette puts it this way: “Not all credit is bad.” One way to start building that history is to use a credit card for purchases you’re already making anyway, then pay the balance off.
“Look at the purchases you used to make in the months prior to getting your credit card,” says Simran. “Now put those expenses on your credit card going forward. As you use your card and pay it off, you’ll build your credit.” The important part here isn’t spending more money because you have a credit card. It’s using credit for expenses already in your budget and having a plan to pay what you owe.
When you sign up for a card, look at the benefits it offers, too. You can get travel points, cash back, and sometimes a sign-on bonus.
Mistake 5: Treating an emergency fund like an all-or-nothing goal.
No one wants to imagine the worst happening, but being prepared can help reduce stress when it matters most. While saving for an emergency fund can be difficult when you’re just starting out, it’s a strong habit to build.
You’ve probably heard you should have the equivalent of three to six months of income or expenses saved. But when groceries cost nearly a third more than they did five years ago, the question becomes how? How can anyone just entering the job market save that much?
“The standard recommendation of three to six months of income saved seems like a lot for someone in their 20s,” says Jeanette. “Just start small and make it a habit. And put it in an account you can’t touch. Over time, these deposits can build a buffer between an unexpected expense and your credit card.”
Mistake 6: Leaving money sitting around in a savings account.
Once you’ve built up some cash, whether it’s a travel fund or a retirement fund, you need to think about where it lives.
A common mistake Jeanette sees people make over and over is leaving their money sitting idle when they don’t need immediate access to it. That doesn’t mean every spare dollar needs to be invested. The right home for your money depends on when you’ll need it and how much risk you’re comfortable taking.
Next month’s rent or an emergency fund should be accessible in a chequing or savings account. But the money you’re saving for 10 years from now can earn returns. Depending on your goals and timeline, those savings could potentially go into something like a GIC or longer-term investments.
This is also where starting early can help.
“Compound interest is powerful, especially when you’re young,” says Jeanette. “Over time, your investments grow not just on the initial amount but also on the accumulated interest. So, the earlier you start, the more you can benefit from that compounding effect.”
You don’t need a huge amount to let your money make money, either. You just need to start. Even small amounts can add up over time. For example, saving $100 a month at 6% starting at age 22 could grow to about $242,000 by age 65. If you start at age 32, that same $100 a month at 6% could grow to about $124,000. Starting earlier gives your money more time to grow.
Mistake 7: Not learning about finances.
Picture yourself in the future: Where do you live? What kind of lifestyle do you have? Do you go travelling? Being able to afford the life you want in your 30s, 40s, 50s, and beyond can start in your 20s.
That doesn’t mean you need to spend your Friday nights studying mortgage amortization tables or calculating your retirement savings (though, if you do, give us a call). But knowing a little about the big financial decisions that might be in your future can help you prepare for them. If you think you might want to buy a home one day, for example, it helps to know that the mortgage payment is only part of the cost.
“Understand what it takes to purchase a home and all the costs associated with a home purchase,” says Jeanette “Beyond the mortgage payment, there are strata fees, hydro, heat, mortgage insurance, and other costs.”
Jeanette says one thing they wish they’d understood in their 20s was how mortgages actually work. Getting familiar with the process and what homeownership really costs can make it feel a lot less intimidating. An advisor can walk you through what it takes to buy a home and what you might need to start saving now to make it possible later.
The same goes for retirement, starting a family, going back to school, or whatever else you might want. You don’t need to know exactly what your life will look like, but thinking a few years ahead, understanding how you might afford it and walking through it with a professional can help you make choices now that give you more options later.
If the future feels too abstract to plan for, make it more concrete by learning about finances.
Mistake 8: Thinking you’re already behind.
It’s easy to look around in your 20s and conclude that everyone else has somehow cracked the code. You might know someone who’s already bought a condo in their 20s, but they may have had help from a relative. On TikTok, there’s likely a guy on your feed with a million-dollar passive income stream, possibly trying to sell you his money-making course.
None of that is a benchmark for where you “should” be.
“The best time to start saving or investing was yesterday. The second-best time is today,” says Jeanette. “Starting a simple savings plan will help build your confidence and hope. It’s never too late.”
You don’t need to change everything today. Just take one small step toward a more planned financial future, like setting up an automatic $25 transfer to a savings account. Then, go from there.
You don’t need to figure it all out alone.
Your finances get more complicated as your life does. That’s normal.
Maybe you’re trying to pay down debt and save at the same time. Maybe you have some money sitting in an account and aren’t sure what to do with it. Maybe you want to buy a home eventually, but have absolutely no idea what that would take.
Those are exactly the kinds of things you can bring to an advisor.
Vancity members can get personalized financial advice for free. You’ll leave with a plan built around what you’re working with, whether that’s $50 a paycheque for savings or a much bigger financial decision.
FAQ
Is it normal to struggle with money in your 20s?
Yes, it’s normal to struggle financially in your 20s. This decade often comes with lower starting salaries and plenty of new expenses. You’re also learning how to manage money independently, so you don’t need to have everything figured out yet. Focus on building habits you can actually stick with.
At what age should you have $100,000 saved?
There’s no age when you “should” have $100,000 saved. How much you can save depends on your income, expenses, debt, goals, and circumstances. Instead of chasing a milestone based on someone else’s finances, set a savings goal that makes sense for you.
How much money should a 20-year-old have?
There’s no magic number. At 20, building the habit of saving consistently can matter more than the amount already sitting in your account. Even a small automatic transfer every payday gives you somewhere to start.
What are some money mistakes I should avoid in my 20s?
Some common ones include not knowing where your money goes, skipping an emergency fund, leaving savings somewhere earning little or no interest, and only thinking about your finances in the short term.
Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. The information contained in this article is from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is not intended to be investment, tax or other advice and should not be relied on without seeking the guidance of a professional to ensure your circumstances are properly considered. Please see our Terms of Use.
