April is Financial Literacy Month, the perfect time to review financial basics. My girls are also turning 20 this month, so I’ve been helping them start adult life with a solid financial background. Your 20s are key for building financial habits that last. You don’t need to be wealthy or an expert—just focus on priorities for lasting impact.

Here are some key priorities you should focus on during your 20s.

1. Build a budget you’ll actually stick to

Budgeting helps you stay aware and in control of your money, not just limit your spending. Since your income might change in your 20s, being flexible is important.

Start with a simple framework:

• 50% needs (rent, groceries, bills)
• 30% wants (entertainment, travel)
• 20% savings and debt repayment

There are many simple budget templates online and apps to get this started. Aspire Budget is a free spreadsheet system with optional paid bank sync and I personally use YNAB which has a free year for college students. Our PlanFirst! website is also a great tool for tracking expenses. Track your spending for a month to understand where your money goes. Consistency is more important than perfection.

2. Create an emergency fund/save-to-spend account

Life in your 20s is full of surprises. Without a financial safety net, emergencies like job changes or unexpected bills can derail your progress.

Aim for:

• Starter goal: $1,000
• Long-term goal: 3–6 months of living expenses

Keep this money in an easily accessible high-yield savings account. Use it for emergencies and large, unexpected expenses. See this blog post for more details on our Save-to-Spend system.

3. Start investing early, even if it’s small

Time is on your side when you are just starting to save. Thanks to compound growth, even small investments can add up over the years.

Focus on:

• Employer-sponsored retirement plans (like a 401(k)) – start with contributing enough to get your employer match (this is free money!). If available, choose the Roth option.
• Individual retirement accounts (IRAs) – contributing to Roth IRA accounts early in your career will jumpstart retirement savings.

4. Build and protect your credit

Good credit opens doors in your 20s, but many young adults enter the workforce with no established credit. A strong score can influence major life decisions, such as renting or buying a car.

Key habits:

• Pay your bills on time—every time.
• Keep credit utilization low (under 30%)
• Avoid opening too many accounts at once

Building good credit takes time, but small, steady steps make a difference.

5. Tackle debt strategically

Not all debt is created equal. High-interest debt like credit cards can weigh you down faster than you expect. If you have debt, create a game plan to pay off, balanced with your other goals.

Two popular payoff strategies:

• Snowball method: Pay off the smallest balances first for quick wins
• Avalanche method: Focus on the highest interest rates to save money

Whichever method you choose, maintaining momentum is key. As you pay off a debt, add its payment to the next one to accelerate progress.

6. Increase your income, not just your savings

When you are looking to save more, cutting costs has its limits. Growing your income over time gives you more options—and control—over your financial future.

In your 20s, invest in:

• Skill development
• Certifications or education
• Networking and career growth

Side hustles help, but most income growth comes from advancing your main career. Keep building skills and seeking growth in your field.

7. Learn the basics of taxes

Taxes can seem daunting in your 20s, but learning the basics helps you save money and avoid costly mistakes.

Know:

• How tax brackets work
• What deductions and credits do you qualify for
• How to file (or when to get help)

Even knowing just the basics can help you make better choices.

8. Protect yourself with insurance

Insurance might feel optional in your 20s, but it protects you from life’s unexpected setbacks.

At a minimum, consider:

• Health insurance
• Renters or auto insurance
• Disability insurance if you rely on your income

9. Define your financial goals

Managing your money starts with knowing what you want to achieve. Clear goals help you stay motivated and measure your progress.

Examples:

• Traveling abroad
• Buying a home
• Starting a business
• Retiring early

Break big goals into clear, small steps to stay motivated and track progress.

10. Build smart money habits early

Long-term financial health comes from everyday decisions. The habits you build now set the stage for your future success.

Focus on:

• Consistency over perfection
• Automation (savings, investments, bills)
• Continuous learning

The sooner you start building these habits, the easier it will be to manage your money.

Final Thought

You don’t have to figure everything out right away. Just start. Small steps like saving, investing, and learning add up over time. Remember that financial literacy is about being intentional, not perfect. And there’s no better time to start than now.

Mary McCraw, CFP®

Vice President

© 2026 The Arkansas Financial Group, Inc., All rights reserved.

The Arkansas Financial Group, Inc. is a Fee-Only Financial Planning Firm located in Little Rock, AR serving clients in Arkansas and throughout the country.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by The Arkansas Financial Group, Inc. [“AFG]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from AFG. AFG is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the AFG’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.arfinancial.com.

Please Remember: If you are a AFG client, please contact AFG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.