The 5 best money management tips I wish I could have told myself when I was 25

• Being young comes with advantages such as early investing which can potentially lead to more wealth down the line.
• And, achieving the level of wealth you want for your future is dependent on what you do while you're young.
• These are five things Chuck Cavanaugh, head of wealth planning for Citi Personal Wealth Management, wishes he knew when he was 25.

As wealth planners, my team and I provide guidance to our clients about how to create financial plans and strategies to help build and sustain wealth throughout their lifetimes. Over the last 30 years, I've been fortunate enough to listen to their challenges and help build solutions for them.

When I think over what I've learned throughout my career, there are choices along the way that I wish I had been more aware of when I was younger. Here are the top five things I would tell my 25-year-old self:

Start investing early

The earlier you start investing, the easier it is to build wealth.

When you invest early, you are able to benefit from growth over a longer period of time. Younger investors have the gift of having decades ahead of them, making now an opportune time to take risks. Young people have a greater capacity to weather market volatility, unlike older investors. Generally, they have the time to rebuild from any market losses they may experience.

Max out your 401(k) and take advantage of the tax breaks

An easy way to start investing is to contribute to your employer's 401(k) plan and take advantage of their matching offers when available. If you contribute the amount needed to obtain the full match, you are already earning a 100% return on your investment.

Your contributions come out of your paycheck pre-taxed, so you don't even know it's missing. Plus they grow tax-deferred until you take out the money for retirement.

If you don't have a 401(k) plan, consider contributing to a tax-deferred plan, such as a traditional or Roth IRA.

Focus on long-term goals

When you're young, you're not thinking about retirement. There are so many other major expenses coming your way, making it easy to focus on short-term goals, such as saving for a vacation or buying a new car. But you also need to focus on longer-term goals.

Breaking your longer-term goals into multiple shorter-term goals can help prevent you from becoming overwhelmed. Since long-term goals, like buying a house or achieving financial independence, may take many years to achieve, saving today will get you closer to making those goals a reality.

Create a budget

No one likes budgeting — and it can be a struggle even among my wealthiest clients — but it's the foundation for acquiring wealth.

Creating a budget forces you to look at your cash flow to determine how much money you need to "keep the lights on" versus how much you earn. A budget keeps spending in check and makes sure your saving is on track to meet your future goals. When you get into the habit of automatically allocating a portion of your budget to put into an emergency fund, you are protecting yourself from financial turmoil should unexpected events occur. The current coronavirus pandemic clearly highlights the importance of having an emergency savings account.

Buy life insurance when you are young

Buying life insurance when you're younger can save you thousands of dollars in the long run. As you get older, the cost of life insurance gets more expensive because the premiums are correlated to age and health. If you wait until you have a partner and children, premiums will be much more expensive.

There are two types of insurance — term and permanent. Term lasts for a period of time and then ends; whereas, permanent is designed not expire if premiums are paid.

If you like the idea of permanent insurance but can't afford it right now, you may want to consider buying a level-term insurance product with a conversion option. With term insurance, you're essentially renting life insurance each year. The conversion option allows you to convert to a permanent policy later when you can afford it without being required to go through the medical underwriting process. I think everyone eventually regrets not having bought more insurance when they were younger - I know I do!

This article was contributed by Charles Cavanaugh, head of wealth planning for Citi Personal Wealth Management, and a member of BI's Money Council.