Your 20s may be just the start of your adulthood, but you want that start to be the right one. Some think your 20s is the time to live it, and you can buckle up and get serious once you’re in your 30s. This may be true in some ways, but when it comes to your money, it’s worth giving it serious thought no matter how old you are.

Below, I outline three financial milestones that everyone should be striving to achieve by age 30, if not sooner. There aren’t any hard and fast rules that say you have to do these things before you’re 30, but it will make managing your future finances a lot easier if you do.

1. Have an emergency fund

A emergency fund is a stash of cash (usually three to six months of living expenses) that you keep on hand in case an unforeseen expense arises. It’s money you use for medical bills, home and car repairs, or to help cover basic expenses if you lose your job.

It’s important to have an emergency fund at any age, but it’s especially important when you’re young. If you don’t have one and you’re going through a costly emergency, you may be facing credit card debt. This can lead to a costly debt cycle that could take years or even decades to come out. During this time, you are unable to prepare for future emergencies or save for your long term goals.

Make a list of all your monthly expenses, then multiply it by three. This is the minimum amount you should have in an emergency fund. If you have a high-deductible health insurance plan, make sure you have at least enough money in your emergency fund to cover this, unless you are saving for your deductible in one. health savings account (CSH). Register once a year to see if you need to increase your emergency fund and always replenish your fund after you have used it.

2. Create a debt repayment plan

Planning how you’re going to pay off your debt now can help you get out of it faster so you can spend money on your other financial goals. List all of your debts, including student loans, credit cards, and installment loans like auto loans or mortgages. Write down their balances, minimum payments and interest rates.

If you are trying to pay as little as possible, you should prioritize debts with the highest interest rates first. Make the minimum payment on all of your debt to avoid late fees, then use whatever extra money you have on the debt with the highest interest rate first. When this is paid off, move on to debt with the next highest interest rate, and so on.

Try to make changes to your budget if you’re having trouble making progress on paying off your debt. Cut down on unnecessary expenses and look for ways to cut down on necessary expenses, such as keeping your thermostat a few degrees higher or lower than normal. You can also consider working a little more here and there to earn more money.

3. Open a retirement account and start contributing

Retirement maybe decades away, but you should start saving for it as soon as possible. The contributions you make in your 20s will take 30 to 40 years to grow before you need to tap into them, so they are much more valuable than your later contributions, which will not gain as much value.

To give you an idea of ​​what I mean, consider $ 100 invested when you were 25. If it generated an average annual rate of return of 7%, it would be worth almost $ 1,500 at age 65. If you invested that same amount just 10 years later, it would only be worth $ 761. By contributing as much as you can as early as possible, you are actually reducing the amount of your own money that you have to set aside for retirement because you will have more investment income to help you.

Your company can offer a 401 (k) or you can open an IRA yourself. You are allowed to contribute up to $ 19,500 to a 401 (k) in 2020 or $ 6,000 to an IRA. Adults 50 and over can contribute an additional $ 6,500 to a 401 (k) and an additional $ 1,000 to an IRA. Do not exceed these limits or you will pay an annual penalty of 6% on the excess until you withdraw it.

Tackling these three things in your 20s will make your life easier because you’ll be prepared for emergencies and on your way to meeting some of your long-term financial goals. If you haven’t done anything yet, start working on it today and you’ll be in your 30s, ready for whatever comes next.