Your twenties are a period of your life marked by big decisions and important transitions. At the forefront of all the choices you’ll make are your decisions involving money management. When you know how to effectively manage your finances, you can build a solid foundation for your long-term goals. Here are some smart strategies for taking control of your finances in your twenties.

Create a Budget

Establishing a budget is one of the most essential steps toward building healthy financial habits. By keeping track of your income and spending habits, you can gain a better understanding of the changes you need to make to achieve your financial goals. Start by allocating a set portion of your income to savings, necessities and wants. Next, track your purchases to see how much of your money is going towards various expenses. Seeing all of your financial activity laid out in front of you can help you make meaningful progress in all aspects of your life.

Plan to Pay Off Debt

If the thought of paying off the debt from your college education seems too big of a goal, remember that it can be accomplished in small steps. One of the most effective ways to pay off your debt a little at a time is to include it as a monthly payment in the budget you created. When you break up the hefty sum into manageable chunks, you can reach your goal much more efficiently. In some situations, though, handling debt on your own can simply be too overwhelming. If this is the case, a personal finance expert like Don Gayhardt can help you get back on track and achieve financial freedom.

Find Roommates

When you’re just starting out in your career with an entry-level salary, paying rent on your own can be intimidating. Fortunately, living with roommates doesn’t have to end after you graduate college. By finding one or more trusted roommates to share your space with, you can have a much easier time managing your share of the rent. Try reaching out to some of your friends from school or anyone else you may know in the area. Everyone needs a little bit of help to get by in the beginning, and living with roommates is an extremely smart decision to make when you’re figuring out how to make ends meet.

Build an Emergency Fund

While your budget is there to help you keep track of your actual costs, your emergency fund helps you stay prepared for any unexpected expenses. This is a crucial fund to have if you ever find yourself in a financial emergency, such as an illness or a sudden loss of income. By keeping at least three months’ worth of money in your emergency fund, you can still pay bills and take care of any other pressing responsibilities you have while you recover from the emergency.

Building good financial habits in your twenties sets you up for success for the rest of your life. Remember to start saving early and plan for the future to reach your long-term goals.