By Dr Dave Schalow, PhD, CLU, ChFC, CFA, CFP
Financial Success | March 12, 2026

When I ask my students if they want to be rich, they all pretty much raise their hands. In your twenties, one of your greatest advantages is the time you have ahead of you. You don't need to start with a lot of money to begin building better financial habits.

You need to start saving money now: for a car, for a house, for emergencies, and for retirement.

Two financial planning principles are critical to your future success:

• Save a percentage of your income.
• Pay yourself first.

START WITH A PERCENTAGE

How much should you save in your twenties? Ten percent is a useful starting goal, but the right amount depends on your income, essential expenses, debt, and circumstances. Start with what you can sustain and build from there.

Anybody who wants to build wealth has to learn how to save and invest money. Beyond the mathematics of compounding, it is the discipline involved. To be successful requires discipline, and how you handle money is one example of how you develop that character.

For perspective, $500 per month is 10% of a $60,000 annual gross income. That is an example, not a requirement. The important first step is to choose an amount that works for your situation and make the habit consistent.

To some of you this may seem like a lot; to some, a little. Start wherever you are and move on from there.

BUILD A BASIC BUDGET

To get started, identify your income and expenses. Go back through your bank statements for two or three months and develop some basic categories. Fill in your best estimates and see where you are.

Income examples include wages, commissions, interest, dividends, rents, and business profits.

Expense examples include taxes, housing and utilities, food, family needs, health, transportation, debt payments, entertainment, clothes, savings, and miscellaneous costs.

If your income is greater than your expenses, you have room to make progress. If expenses are greater than income, you need to change something.

PAY YOURSELF FIRST

Most people think in terms of:

Income − Expenses = Savings

Although this looks solid, stuff happens. When unexpected expenses come up, savings is often the first thing sacrificed. Your future is too important to depend entirely on whatever happens to be left at the end of the month.

A better habit is to plan this way:

Income − Savings = Money Available for Expenses

It may not seem like much of a distinction, but it can change your behavior. Plan a regular savings contribution, then organize spending around what remains while meeting essential obligations.

You are the one doing the work in your life. Your future should benefit from some of that effort. Don't let creditors, vendors, and other people receive everything you earn.

WHEN THE NUMBERS DON'T WORK

If your income-and-expense analysis shows a shortfall, you need to address it. You need to make more money, spend less money, or combine the two.

Take responsibility for the part you can change. That is liberating: once you identify the problem, you can begin working on it.

​You don't have to solve everything today. Start by reviewing your numbers, choosing a realistic savings amount, and making your first consistent contribution.