Investing as a young adult is one of the most important things you can do to prepare for your future. You might think that you need a lot of money to start investing, but it’s easier than ever to get going with small amounts. Once you set up your investment accounts, you’ll be well on your way to saving for goals like retirement, purchasing a home or even future travel plans.

But before you dive headfirst into the market, it’s important to prioritize paying off any high-interest debt that might be straining your finances and then build up an emergency fund with savings that could meet at least three to six months of expenses.

Once that is handled you can get a jump on investing, even if you’re starting small. Developing a consistent approach to saving and investing will help you stick to your plan over time.

Money invested in your 20s could compound for decades, making it a great time to invest for long-term goals. Here are some tips for how to get started.

1. Determine your investment goals. Before you dive in, you’ll want to think about the goals you’re trying to achieve by investing.

“It’s ultimately looking at all the experiences you want to have over your lifetime and then prioritizing those things,” says Claire Gallant, a certified financial planner and co-founder of Vivify. “For some people, maybe they want to travel every single year or they want to purchase a car in two years and they also want to retire at [age] 65. It’s crafting the investment plan to make sure that those things are possible.”

The accounts you use for short-term goals, like travel, will differ from those you open for long-term retirement goals.

You’ll also want to understand your own tolerance for risk, which involves thinking about how you’ll react if an investment performs poorly. Your 20s can be a great time to take on investment risk because you have a long time to make up for losses. Focusing on riskier assets, such as stocks, for long-term goals will likely make a lot of sense when you’re in a position to start early.

Once you’ve outlined a set of goals and established a plan, you’re ready to look into specific accounts.

2. Contribute to an employer-sponsored retirement plan.

Twenty-somethings who begin investing through an employer-sponsored tax-advantaged retirement plan can benefit from decades of compounding. Most often, that plan comes in the form of a 401(k).

A 401(k) allows you to invest money on a pre-tax basis (up to $22,500 in 2023 for those under age 50) that grows tax-deferred until it’s withdrawn in retirement. Many employers also offer a Roth 401(k) option, which allows employees to make after-tax contributions that grow taxfree, and you’ll pay no taxes when taking withdrawals during retirement.

Many companies also match employees’ contributions up to a certain percentage.

“You always want to contribute enough to at least get that match, because otherwise you’re just walking away from more-or-less free money,” Gallant says.

But the match might come with a vesting schedule, which means you’ll have to stay at your job for a certain amount of time before you’ll receive the full amount. Some employers allow you to keep 20% of the match after one year of employment, with that number steadily increasing until you receive 100% after five years.

Even if you can’t max out your 401(k) right away, starting small can make a huge difference over time. Develop a plan to increase contributions as your career progresses and income climbs higher.

Bankrate’s 401(k) calculator can help you figure out how much to contribute to your 401(k) in order to build up enough money for retirement.

3. Open an individual retirement account. Another way to continue your long-term investment strategy is with an individual retirement account, or IRA.

There are two main IRA options: traditional and Roth. Contributions to a traditional IRA are similar to a 401(k) in that they go in on a pre-tax basis and are not taxed until withdrawal. Roth IRA contributions, on the other hand, go into the account after-tax, and qualified distributions may be withdrawn tax-free.

Investors younger than age 50 are allowed to contribute up to $6,500 in 2023.

Experts generally recommend a Roth IRA over a traditional IRA for 20-somethings because they’re more likely to be in a lower tax bracket than they will be at retirement age.

“We always love the Roth option,” Gallant says. “As young people make more and more money, their tax bracket is going to increase. They’re paying into those funds at that lowest tax rate today, so that when they retire they can take that money out without tax.”

4. Find a broker or robo-adviser that meets your needs. For longer-term goals that aren’t necessarily retirement-related, like a down payment on a future home or your child’s education expenses, brokerage accounts are a great option.

And with the advent of online brokers such as Fidelity and Schwab, as well as robo-advisers like Betterment and Wealthfront, they’re more accessible than ever for young people who might be starting out with little money.

These companies offer low fees, reasonable minimums and educational resources for new investors, and your investments can often be made easily through an app on your phone. Wealthfront, for example, charges just 0.25% of your assets each year with a $500 minimum balance to get started.

Many robo-advisers simplify the process as much as possible. Provide a bit of information about your goals and time horizon and the robo-adviser will choose a portfolio that matches up well and periodically rebalances it for you.

“There’s a lot of good options out there and each of them have their own specialty,” Menke says. Shop around to find the one that best fits your time horizon and contribution level.

5. Consider leveraging a financial adviser. If you don’t want to go the robo-adviser route, a human financial adviser can also be a great resource for beginning investors.

While it is the more expensive option, they’ll work with you to establish goals, assess risk tolerance and find the brokerage accounts that best fit your needs. They can help you choose where to direct the funds in your retirement accounts as well.

A financial adviser will also use their expertise to steer you in the right investment direction. While it’s easy for some young investors to get caught up in the excitement of daily market highs and lows, a financial adviser understands how the long game works.

“I don’t believe investing should be exciting, I think it should be boring,” Menke says. “It shouldn’t be seen as a form of entertainment because it is your life savings. Boring is okay sometimes. It’s coming back to what your time frame is and what your goal is.”