Personal Finance Steps in Your 20s - as part of the expert series by GeoBeats. People who are now in their twenties, they are starting in their career and they are concerned about where should they be financially. Really in their twenties they should be building their foundation. By that I mean they should start with a savings account so that they are not having to rely on their credit cards, and the rule of thumb is to save ten percent of your yearly income and put it in a savings account, a regular savings account where you have very easy access to that money. Once you have that savings account established, also you should build what I call an emergency fund, those are for the bigger things that could go wrong. But the nice thing about the emergency fund is that you could possibly put that into an IRA, and the ideal thing would be into a Roth IRA. The nice part about the Roth IRA is that any money you put in you can take out at any time. So that is why it makes it nice that it is an emergency fund, because if you need it you could go and access it, but it is also there to use for the future. And the suggestion is that the emergency fund be twice what the savings account would be. Now, if someone is employed that ten percent is good, if they are in business for themselves, they probably should double those two figures, both the savings and emergency. If they are someone that is at risk of possibly losing their job, then they might even want to make it forty percent in their savings, and so on. In addition, they should be looking at, once they are on their way to getting those savings built, is start looking at putting together a down payment for a home. Usually the rule of thumb is twenty percent. In some cases they could go with ten percent. In addition they want to start at least contributing to their retirement accounts that they work for an employer that offers matching. So at this point, if they are on their way for doing that, they are building themselves a nice foundation.
