You probably already have a checking account, but what about a savings account? An emergency fund? How about a 401(k) or Roth IRA? Here are seven financial accounts that you should set up now — because it's never too early to start saving.

Money’s complicated.

Or at least it can feel that way when you’re a young adult. You’re wondering where to live (and how to pay for it), and just settling into your career. Things like retirement funds and investment accounts may seem a million years away from where you are now.

But trust me, you want to start thinking about your finances now.

So, where do you start? How do you handle your finances in a way that makes sense for your future, while still allowing you to live a life you love right now?

The first step is that, instead of sticking to just one financial account, you should make sure you have a variety — and set them up sooner rather than later — to get you where you want to be.

Why should you have a variety of financial accounts?

Whether it’s a short-term or long-term goal, every financial goal has to start somewhere. And since each financial goal is different, it makes sense to use different accounts or tools to get there.

For example, you don’t want to worry about saving for retirement in your regular savings account, where interest rates are low. Instead, you should be keeping your money in a 401(k) or Roth IRA, where you can watch your money grow much faster, through the power of compound interest.

Financial accounts every Gen Z should have

Below is a list of all the accounts you should have as a Gen Z — and yes, even a retirement account is included in there. If you don’t have all of these as of yet, that’s okay. Some of them, like an emergency fund, may be beyond your budget right now, when you’re just starting out on your own.

Read more: 5 steps to create a budget that actually works

Just work your way through the list and open each as you’re financially able to. And keep reminding yourself it’s never too early to get started on your future.

Checking account

Chances are, you already have a checking account (unless you’ve been keeping your money in a shoebox under your bed).


Checking accounts are a way to access your cash while keeping it in a safe place at a financial institution (aka, not a shoebox under your bed). You can access your money whenever you like with a debit card, without having to worry about how much cash is in your wallet — although it’s a good idea to always know how much is in your account.

Checking accounts are also a great way to get your paycheck cashed without paying a fee — most banks let you use direct deposit from your employer into your checking account fee-free.

Read more: Best no-fee checking accounts

Savings account

Saving accounts are next up on my must-have list. Why? Because it’s a great place to stash your cash for both short- and long-term goals.

A savings account is typically linked to a checking account, where you can transfer money from, into the savings account.

If you have a savings account with a credit union, you may have to go in person to deposit a check or cash, but otherwise, most savings accounts are easily accessible via online banking or bank app.

I have multiple savings accounts to help me reach different goals, such as a trip I’m planning.

Read more: Best high-yield savings accounts compared

Emergency fund

An emergency fund is a specific savings account that you use for emergencies only. I’m talking about things like your car breaking down, suddenly having to move because your landlord sold your building, a pet becoming ill, or anything else that you weren’t planning but have to pay for.


Having cash on-hand to help out during a crisis can save you in the long run, since you won’t have to worry about putting the expenses on a credit card or taking out a personal loan. An emergency fund covers your future self without having to think twice.

Just remember: an emergency fund is not a savings account for booking vacations or for using as extra spending money!

Not sure how much to put into your emergency fund? Check out our emergency fund calculator.

Read more: Emergency funds: everything you need to know

Robo-advisor account

Investing is essential, and you’re never too young to start, especially when you have the power of compound interest on your side. But where do you start?

I recommend going with a robo-advisor.

A robo-advisor is a financial institution that manages your money on your behalf. It used to be that you had to open an investment account through a traditional brokerage — and start-up amounts could go from a few hundred to a few thousand dollars. But robo-advisors (an investment platform managed by a computer algorithm) have made investing more accessible for everyone, and you can sometimes start with as little as $1.

Robo-advisors can set up a financial plan for you, tailored to how much risk you’re willing to take. All you have to do is sit back and watch your investments grow.

Read more: The best robo-advisors

Your company’s 401(k)

Speaking of investing, if you aren’t already, you need to be investing in your company’s 401(k) plan (assuming your company offers one).

A 401(k) is a retirement savings plan offered through your employer at no additional cost. A pre-determined amount of your pay (before taxes) is invested on your behalf. You can choose how you would like the money invested, such as in index funds or individual stocks.


The main difference between your 401(k) and a regular investment account is that you have to wait until retirement to access your money. Yes, retirement might seem like a long way off, but future you will thank you for signing up for a 401(k) now. Time is on your side, so take advantage of it.

Read more: The $1 million 401(k) investing strategy for 20- and 30-somethings

The wonderful thing about investing in your company’s 401(k) is the power of compound interest. Compound interest is the interest you earn on any investment gains you’ve already made. Quite simply, it’s the interest you’ve earned on interest.

So, if you invest $10 and your $10 made $1, you will now be earning interest on $11. This amount automatically goes up the longer you have your money in the account.

To test out the math for yourself with your own investments, check out our compound interest calculator.

Roth IRA

The last financial account I recommend is a Roth IRA.

A Roth IRA is an individual retirement account (IRA) that you self-fund with money you’ve already paid taxes on. This means that, unlike a 401(k), you don’t need to wait until you are 59½ to pull money from it.

However, there is an early withdrawal penalty — with a few exceptions, like buying your first home, going back to school, or birth or adoption expenses.

Like the other investment accounts mentioned, your money is invested on your behalf, but you have complete control over who is managing your money. You can also max out an IRA with a much smaller amount than your 401(k), so if quick wins keep you motivated, this might be the account for you.

Read more: Roth IRAs for young adults: why starting early pays off

Life insurance

Okay, we know that no one likes thinking about the worst. Especially at your age, where your entire life is ahead of you. But just like with emergencies, bad things can happen, and you’ll want your family to be covered. Plus, the younger and healthier you are, the lower the rate you’ll get on your life insurance.

Life insurance is a legally binding contract that states, should you die, the insurer will pay out a certain sum of money to your beneficiary (the person you designate as a recipient). This money can cover funeral expenses, replace any loss of income should you have dependents, and can be used to pay any outstanding debt you were responsible for — so that if your family cosigned on the loan they don’t get stuck with the bill.

Read more: Life insurance: is it worth it and when do you need it?

The bottom line

You’re never too young to start saving, and a variety of financial accounts can help you get through the next step of life, whatever it may be.

By diversifying your money, you’ll have more control over meeting your financial goals and be a step above the rest when it comes to significant life events, no matter what timeline you choose.

Featured image: Asier Romero/

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About the author

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Once homeless in high school, Athena Valentine Lent is now a nationally published financial columnist for Slate Magazine. She’s also a passionate financial writer who received the Plutus Award for Best Personal Finance Resource for Underserved Communities for her work in the Latino community. When not working, she can be found reading a Stephen King novel with her main man, a polydactyl cat named Harrison George.