How to Create a Financial Plan for Your 20s and 30s

Build a Financial Plan for Your 20s and 30s to Achieve Financial Goals

Achieving financial success in your 20s and 30s is critical to securing a strong financial future. Creating a financial plan can be an intimidating task, however having an organized plan in place can help you stay on track and meet your financial goals.

Whether you are looking to save money for retirement, a home purchase, topping up an emergency fund, or just questioning how you will make your money last until the end of the month, creating a financial plan is often the best way to feel at ease. Read through this article to understand the key steps needed to create a successful financial plan as someone in their 20s and 30s.

1. Know Your Net Worth

A key part of understanding your financial standing is recognizing your net worth. Calculated by subtracting your total liabilities from your total assets, your net worth is the snapshot of your overall financial health. By constantly revisiting and recording this figure over a period of time, you will be able to track changes in your financial health.

2. Analyze Cash Flow

Categorize and analyze your cash flows to determine which areas of expenditure you can reduce. This can be done by breaking down your spending into distinct categories such as ‘utilities’, ‘food’, ‘entertainment’, ‘transport’ etc. then tracking how much you spend in each category on average over a period of time. Being mindful of you current spending habits can help you to identify areas which would benefit from more attention in your financial plan.

3. Establish Realistic Financial Goals

Focusing on what you need to achieve financially is a great way to understand where you should be aiming or focusing your money. Not setting goals for yourself can mean you miss out on important milestones and fail to build a secure financial future.

You may want to list your long term and short-term goals to keep you motivated and on track when creating your financial plan. Common long-term goals could include saving for a mortgage deposit, retirement, or a large purchase, while typical short-term goals could include cutting unnecessary expenses, increasing savings rate, or investing in a new business venture.

4. Create an Emergency Fund

Creating an emergency fund should be one of your top priority’s when establishing your financial plan. The aim of an emergency fund is to ultimately give you peace of mind in case of job loss, emergency home repairs, or other unforeseen circumstances.

As a general rule of thumb, you should aim to save up an amount equivalent to at least three months of your income, but if possible you should aim to save closer to six months. This may seem like a large amount, however budgeting for extras like holidays and birthdays can also help you reach your savings goal faster.

5. Figure Out Your Retirement Plan

When building your financial future, retirement should be one of your main considerations. Whether you aim to retire early and start travelling the world, or plan to retire comfortably and spend more time with your family, saving will ultimately be the key to achieving this.

Starting a pension in your 20s or 30s is one of the most effective ways to secure your financial future. Automatic pension plans can help you to grow your pension through monthly contributions while also allowing you to reap the benefits of compound interest over a longer period of time.

6. Track Your Progress and Make Adjustments

Only by tracking your financial performance can you know whether parts of your plan need adjusting and for which you have room for improvement. Examining your cash flow, net worth and goals are all essential components to making sure your financial plan is working.

Seeing numerical results of your work can be a great way to remain motivated and encouraged to continually improve your plan. Furthermore, understanding your successes or failures can help you to adjust your financial plan accordingly and get back on track.


Creating a financial plan for your 20s and 30s is an essential aspect of having a secure financial future. Key steps to consider when establishing a financial plan include knowing your net worth, analyzing your cash flows, setting financial goals, creating an emergency fund, figuring out your retirement plan and tracking your progress.

By following these steps and making adjustments where necessary, you can be sure to meet your financial goals throughout your 20s and 30s.

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