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During this time, it's essential to focus on cultivating good financial habits. Saving around 10 to 15 percent of your pre-tax income is advisable. This saving can be dedicated not only to retirement but also to building an emergency fund or saving for major purchases.
One critical strategy to adopt in your 20s is budgeting. Monthly budgeting lets you track income and spending, providing insights into your financial habits. Regularly reviewing your budget can prevent overspending and keep you aware of your financial status.
It's also vital to prioritize paying off high-interest debt, such as credit card balances, before making investments. If your employer offers a retirement plan with matching contributions, maximize this benefit; it’s essentially free money for your future savings.