3 Essential Finance Moves to Make Before You Turn 30

Your 20s are an interesting decade of life. You're learning to function like an independent adult and may face some tough financial decisions, yet you're not quite ready to throw in the towel and commit to being in bed by 9:30 p.m. every night.

Either way, the moves you make in your 20s have the potential to set you up for success later in life. So with that in mind, here are three pivotal moves to make before you reach age 30.

1. Build an emergency fund

Did you know that 63% of Americans sorely lack the funds to cover an emergency expense? SecureSave reports that most Americans couldn't cover an unplanned bill costing $500. 

Your primary financial priority before age 30 should be to build up an emergency fund -- one with enough money to cover a good three months of essential bills at a minimum. That way, if, say, your car stops running and needs a $2,000 repair, you won't automatically have to charge that expense on a credit card and pay interest on it for months on end.

Of course, coming up with the funds for your emergency savings might take time. So a good bet is to set a reasonable monthly goal so you don't get discouraged. 

Let's say your essential living costs come to $3,000 a month. The idea of having to save $9,000 might be enough to get you to quit before you even get started. Instead, break that total down into smaller increments so you can celebrate each win along the way.

2. Figure out if you're in the right career

Some people take a random job when they graduate college to pay the bills and get a feel for what it's like to be part of the workforce. Others take a job in a field they think they want, only to realize it's not all it's cracked up to be.

Your 20s are an important time to assess your career and make sure you're happy with it logistically, emotionally, and financially. There's nothing wrong with making a career change much later in life. But let's face it -- if you're 28, single, and don't have kids, you may have an easier time starting over in a new profession (and potentially taking a pay cut) than if you're a 38-year-old parent with a mortgage to pay every month.

One thing you definitely want to ask yourself is whether your career is conducive to a good work-life balance. Also, ask yourself if it pays enough to support the lifestyle you want. There's nothing wrong with deciding to go a different direction because it's more lucrative and will lend better to your financial goals.

3. Start to save for retirement

You shouldn't be expected to save, say, $100,000 for retirement by the time you turn 30. But you should save something for retirement in your 20s, because the more time you give your money to grow, the more you can benefit. In fact, it's important to simply get into the habit of saving for retirement in your 20s, even if that means allocating $30 or $40 a month to an IRA or 401(k) and planning to ramp up over time.

For some context, over the past 50 years, the stock market has averaged an annual 10% return. If you have a $10,000 IRA balance by age 30, even if you don't contribute another dime, and if your portfolio gives you 10% a year, you'll have a little more than $281,000 by age 65.

To be fair, you'll probably want a larger nest egg than that for retirement. But Northwestern Mutual reports that the average saver in their 60s has $112,500 in retirement funds today. That $281,000 puts you way ahead, and that assumes you'll stop funding your IRA at age 30, which you probably won't do.

The financial decisions you make in your 20s could have a huge impact. So before you turn 30, do your best to build your emergency fund, make sure you're happy with your career, and get into a retirement savings routine.