Nothing beats the thrill of your 20s. As your career kicks off, you may be eager to make mistakes, take chances, and enjoy the rewards.

It’s also a key time for your finances.

With four decades until retirement, there is no better opportunity to start investing. If you are nervous about limited funds, or unsure of where to begin, we have you covered.

Why Investing in Your 20s Matters

Being in your 20s often feels like a financial minefield. It’s difficult enough to cover the basics like rent, car payments, and groceries. Student loan payments only make things harder.

It may be tough to start investing when your budget feels tight—making it easy to push saving for the future aside.

Start Investing Small

The problem is, it may take years to pay off debt and boost your income.

Waiting until you are “stable enough” to start investing could mean missing out on years of growth. That’s why it’s critical to start investing early—especially for long-term savings goals like retirement.

Life is all about tradeoffs.

There is nothing wrong with focusing on your current bills. But you may regret ignoring your other financial goals later. Saving for a vacation, home down payment, wedding, or retirement takes time.

The sooner you start investing, the more time your money has to grow. Even small amounts, like $20 or $30 a month, may add up over time.

Best Investments to Make in Your 20s

It’s normal to feel intimidated by investing.

There is a lot of confusing industry jargon. And the media’s obsession with the daily ups and downs of the market can be terrifying.

You may feel safer to observe from the sidelines, but this could be a mistake.

These are some of the easiest types of accounts to start with:

Save Easier, Travel More

Take advantage of your company’s retirement plan.

One of the best ways to start investing is through your company’s 401(k) or 403(b).

You can invest every time you get paid through automatic contributions. Many companies are willing to match your deposits up to a certain percent (that’s free money!)

Consider opening an individual retirement account (IRA).

If you don’t have access to a workplace retirement plan, consider opening an IRA.

Two common options are a traditional IRA or Roth IRA.

Traditional IRAs are like a 401(k) because your money goes in pre-tax. You can avoid paying taxes on the front-end, but you will owe money when you make withdrawals.

Roth IRAs are different because contributions happen after taxes, so you won’t owe money when you take it out in retirement, assuming it’s a qualified distribution. If you make a withdrawal before 59 ½, there can be penalties.

Save for a joint goal by investing with Twine.

Twine makes it easy to plan for a large purchase like a vacation or a wedding.

Often, the hardest part of investing is getting started.

Trying one of these options may help you feel more comfortable with the stock market. By seeing how it works, you may be less likely to make costly, emotional investing decisions later.

Best of all, you will get into the life-long habit of regular saving and investing.

How to Invest in Your 20s

Opening accounts is easy. The same goes for transferring money.

But actually choosing the investments? Not so much.

You may feel nervous about changes in the stock market. Or worried about making the “wrong” choice. The problem is, there is no one-size-fits-all approach —not even one based on your age.

Your portfolio should match your preferences.

Are you saving for retirement or for next year’s vacation? Your investments should be appropriate for each of these timelines.

It’s also important to consider how you feel about risk.

Do stock market swings keep you awake at night? Or, do you feel comfortable with day-to-day losses? These feelings may impact your choices.

Investments often take time to mature. The best investments you make in your 20s might not be realized until years later.

Why You Should Begin Investing Early

Your 20s are a pivotal time in your life.

Earning a degree and starting your career paves the way for many years of success. The same applies to your finances.

By starting to save and invest now, you may enjoy decades of growth, and set yourself up for a healthier future.

Put your money to work.

Try Twine