How to Get Started with Investing in Your Early 20s
posted
January 20, 2026
in
Budgeting & Saving
When you're in your early 20s, investing can feel like something that can wait, but starting now gives you a major advantage. The power of compound interest means that even small, consistent contributions can grow into substantial savings over time. For example, investing just $100 per month starting at age 22, assuming a 7% annual return, could grow to over $240,000 by age 62. Wait just ten years to start, and you’d end up with only half that amount. The most valuable asset you have when it comes to investing is time.
Build a Financial Foundation First
Before jumping into investments, it’s important to make sure your financial base is secure. That includes having an emergency fund to cover unexpected expenses, paying off high-interest credit card debt, and sticking to a monthly budget. A strong foundation not only helps you stay financially stable, but it also gives you the freedom to invest with confidence. If you don’t have a savings account yet, Greater Iowa Credit Union offers Primary Savings accounts designed to help you build that essential cushion.
Understand Your Investment Options
You don’t need to be an expert to start investing, but it’s helpful to know where to begin. For many young investors, a workplace retirement account is the first step. If your employer offers a 401(k) or 403(b) with matching contributions, take full advantage of it. That employer match is essentially free money. If you don’t have access to a retirement plan through work, consider opening a Roth IRA. Since Roth IRAs are funded with after-tax dollars, qualified withdrawals in retirement are tax-free, which is a valuable benefit for young adults who are likely in a lower tax bracket now than they will be later. GICU offers Individual Retirement Accounts with competitive rates and personalized guidance to help you get started.
Start Simple with Smart Strategies
You don’t need a lot of money, or deep knowledge of the stock market, to begin making investments. Use these beginner-friendly strategies to set yourself up for success:
- Start with low-cost index funds or ETFs for instant diversification
- Contribute a fixed amount each month, a strategy called dollar-cost averaging
- Avoid chasing quick returns; focus on long-term growth
- Review your progress once or twice a year, not every day
Automate Your Strategy
One of the most effective ways to stick with investing is to automate it. Set up recurring contributions into your Roth IRA or investment account to take the stress of constant decision-making out of the equation and help yourself to stay consistent, even when life gets busy. The habit of investing regularly matters more than the exact amount. You can always start small and increase your contributions as your income grows.
Let GICU Help You Get Started
Investing doesn’t need to be overwhelming. At Greater Iowa Credit Union, we’re committed to helping you take the first step with confidence. Whether you’re ready to open a Roth IRA, build your savings, or just want to talk through your options, we’re here with honest guidance and financial tools designed for real life. Open an account today or learn more about how to become a GICU member.