No Savings in Your 20s? Here’s How to Start Building Wealth Now

Only a small slice of Generation Z is in the habit of paying themselves first. Just 15% of Gen Zers set aside a percentage of every paycheck in savings, and only one in five contribute to a 401(k) or other retirement account, according to a 2024 Bank of America survey.

The good news: Even modest, consistent steps made in your early 20s can snowball into real security by your 30s. Here are some tips on how to begin.

Start With an Emergency Fund

Nearly 60% of Gen Zers say they lack enough savings to cover three months of expenses in case of emergency. But Gen Z isn’t alone in that. According to Federal Reserve data, about half of all adults (55%) have three months of emergency savings.

A target of three months’ expenses can feel impossible when rent eats 30% or more of your net income. So break down the goal: Aim first for a $500 to $1,000 “starter” fund in a high-yield savings account. Once that mini-fund is in place, redirect fresh dollars to higher-impact goals, such as saving for retirement or paying off debt, knowing that a flat tire won’t derail your plan.

• Set it and forget it: Set a recurring transfer to land in your savings account on payday, so you never “see” the money.
• Park it somewhere separate: Keeping that money out of sight—but still accessible—curbs the urge to dip in for concert tickets or other non-essential expenses.
• Use windfalls: Tax refunds, cash gifts, bonuses, or side-gig payments can help fast-track this first milestone.

Put Your Saving on Autopilot

The biggest advantage that 20-somethings have is time, but that benefit evaporates without consistent saving. Behavioral research shows that “set-it-and-forget-it” systems beat good intentions every time. Try layering these tools:

• Percentage-based transfers: If your cash flow is lumpy—say, from hourly work or gig income—link your checking account to an app like Oportun, Qapital, or Catch that skims, for example, 10% of every deposit into savings.
• Budget frameworks: Whether you try the 50/30/20 rule or a zero-based budget, giving every dollar a “job” ensures that saving isn’t an afterthought.
• Round-up apps: Micro-investing platforms like Acorns round purchases to the nearest dollar and funnel small change into ETFs. It won’t replace a full retirement plan, but it builds investing muscle while balances are modest.

Capture ‘Free Money’ Early

If your workplace offers a 401(k) match, contributing at least as much as that match percentage is equivalent to getting a 100% immediate return—a deal you will never find in the market. But four out of five Gen Zers are leaving that money on the table. Don’t be one of them.

• No plan at work? Open a Roth IRA. Contributions (up to $7,000 in 2025) come from after-tax dollars but can be withdrawn tax- and penalty-free in a pinch. They act as both a quasi-emergency fund and a tax-advantaged retirement stash, which is valuable for new savers.
• Automate escalations: Many 401(k) plans let you increase contributions by up to 1% every January. Set it once and let compounding do the future heavy lifting.
• Consider a side-hustle SEP IRA: Freelancers can shelter up to 25% of net self-employment income in a Simplified Employee Pension. Even a few hundred dollars a year will cut your tax bill while boosting long-term savings.

The Bottom Line

Getting on the road to financial security while you’re still in your 20s is about proving to yourself that you can live on slightly less than you earn and then letting automation and time—via compounding—do the work. Start with a small cash buffer, automate transfers so saving happens first, and scoop up every dollar of employer or IRS-sanctioned “free money.” Do that consistently, and the habits you forge now will matter far more than the balance you see today.