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By Daniela Pierre-Bravo

If you’re in your 20s, chances are you’re new to the working world and still trying to find your bearings amid other big changes, like graduating from college and perhaps moving into your own place. Still, it’s important to start laying the groundwork now to achieve financial security for the many decades to come.

That’s why I recently spoke to Libby Leffler, vice president of membership at SoFi, a personal finance company. Here are the five personal finance tips she recommends every young person should implement by the time they are 25 to maximize their financial health:

Pay yourself first.

"When you’re beginning your career, it can be difficult to find extra money," Leffler says. "That’s especially true if you’re saddled with student loan debt, alongside 44 million other people in the U.S. Or, perhaps you took a job in a more expensive city and now have a sky-high rent to match."

VP of Membership at SoFi, Libby Leffler.
VP of Membership at SoFi, Libby Leffler.Steve Maller / SoFi

Leffler suggests that each month, after you pay off your essential living expenses, that you pay yourself first. "Get into the habit of saving this bit of money. Earmark savings for different purposes, like an emergency fund you can dip into if something unexpected happens. If you get into a paying yourself first mindset, it’s easier to hold yourself accountable," she says.

Know what you spend.

"It’s important to know exactly how much you’re making and how you’re spending it. Create a general outline [or use a digital tracker] that allows you to [clearly see these numbers]," Leffler advises.

Then take a hard look and try to identify wasteful spending. For example, she says, if you discover that more than 20 percent of your monthly income is going toward food delivery fees, you’ll know that you need to cut back. It may sound obvious, but seeing the actual numbers in front of you will make you more mindful about your spending. You’ll also start to notice spending trends and find opportunities to adjust your financial goals over time.

Invest in your future.

"If you’ve never considered the different ways you can make your money work for you, now is the time to start," Leffler adds. "[Think about] investing in the market or moving idle cash into a high-interest checking or savings account."

She recommends using your short- and long-term financial goals as a framework to determine which investments and account types make the most sense for you. For example, if you have a short-term goal of building an emergency fund, you may want to start saving money in an easily accessible cash account, like high-yield checking. A longer-term goal, like retirement, may mean investing in stocks and exchange-traded funds (ETFs) through your 401(k).

Have a money buddy.

Leffler says it’s easier to hold yourself accountable if you have a friend who supports your financial goals. Ideally, a good “money buddy” has similar financial values as you. "Though it may seem painful to skip out on a concert or that fun dinner you’ve been looking forward to, it becomes much easier when you have a built-in support system – your money buddy – to encourage you to stay on track," she adds.

Ask for more.

According to LinkedIn, millennials change jobs four times in their first decade out of college. "It’s not unrealistic to imagine that you may be faced with a pivotal career decision in the near future, like a new job offer," Leffler says.

Though a new opportunity is always exciting, you’ll want to carefully evaluate and negotiate the compensation package. Consider every aspect of the deal, including base salary, performance bonuses and vacation time, Leffler notes.

And if you’re considering asking for a raise, do your homework. "Conduct market research on your current role and educate yourself about your company’s pay practices," Leffler says. "Good market research includes both looking at data from salary comparison websites and talking to people in your industry to get a sense of the going rate. Then, look back at the things you have accomplished over the last six to 12 months. Consider the biggest contributions you’ve made and make sure to highlight them."

Leffler also points to a recent study conducted at SoFi, revealing that over half of the company’s members said they thought they were underpaid – yet only 33 percent of them planned to ask for a raise.

She notes that SoFi provides a digital tool (getthatraise.sofi.com) to help simplify the process of preparing to ask for a raise by packaging your years of experience, key achievements and shining accomplishments.

And if your boss says “no” to the raise, don’t get discouraged. Leffler says follow up by asking for guidance on the things you can do to be considered for a raise or promotion in the next review cycle.

Daniela Pierre-Bravo is Know Your Value's millennial contributor. Read more about her here. Follow her on Twitter and Instagram.

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