Being a twenty-something is like traversing the no man’s land between adolescence and adulthood. High school dramas are long behind you, while mortgages and mid-life crises are still far ahead on the horizon, but this expanse of land isn’t without its obstacles.
The terrain is rocky and responsibilities are being fired at you like bullets from all directions.
Then, all of a sudden, you start haemorrhaging cash. Money is being pumped out of your pocket at an alarming rate, until eventually you find yourself living in your parents’ basement and telling your friends you can’t come to the pub because drinks have gone up by 50c.
The struggle is real, people.
Luckily, there are plenty of things you can do to stem that flow and keep your money in your pocket, where it belongs.
1. Know your accounts
Like email addresses, over time people tend to accumulate financial accounts. Savings accounts, travel cards, superannuation… the older you get, the more you attract. But what a lot of people don’t realise is how important it is to regularly check all of these accounts.
It’s the only way to truly track your income and spending, guarantee your employer is paying you the correct amount (particularly into your super fund) and ensure you can actually afford that last drink or a cab ride home.
2. Bank statements aren’t just for scrunching up old gum in
It’s a common misconception that once your money hits your bank account, it’s safe and sound. But not checking your bank statements can lead to all sorts of dramas.
Failed transactions, accidental purchases and even fraud could slip right under your radar if you don’t check your statements and ensure you can account for all the purchases made. Because if you find an unexplainable transaction, it may mean someone else is using your account.
3. It’s never too early to start saving
It’s one of life’s most important skills, and whether you’re looking six months ahead to your next overseas trip, or ten years into the future to buying your first house, it’s never too early to start saving.
A little research into savings accounts is the best way to make your money go further, particularly if your bank can offer you incentives to making your savings goals, and enforce restrictions on how much you can deduct from your account.
Compound interest is also offered through a number of savings accounts, which lets you earn interest on your savings, plus on the interest you’ve already earnt. With compound interest, your money could actually double every 10 years if you achieve a 7% annual return. Talk about making it rain!
4. Find a job that pays you properly
Finding a job that pays you correctly and treats you right can be difficult, particularly if you’re paid cash-in-hand. Try your best to find an employer who uses legal avenues to pay you, and always check Fair Work to ensure you’re earning the right amount.
Check regularly whether you are being paid super and that you are getting your fair share of other benefits like tips, because you work hard and you damn well deserve it!
5. Get your super together early
Super might seem like something you don’t need to worry about for the next few years, but do the simple math: the earlier you start earning = the earlier your employer contributes to your super = the more savings you’ll have when you retire (plus more chance to grow your money with compound interest).
If you’ve had a few different jobs and have a few separate super accounts, get them together and channel your funds into one account to watch it grow.
It’s one of the most feared words in the English language, but budgeting your money is actually a really great way to force yourself into saving.
Planning ahead of time how much of your income will be spent on things like food, petrol and transport, how much will be “fun money” and how much will go to your savings will help you stick to your guns and prevent reckless spending.
7. There’s an app for that
There’s an app for everything these days, and that includes apps to help you manage your money. Apps like Toshl will help you create and stick to a budget, while your bank is sure to have an app that will give you easy access to your account to keep track of your money.
8. Strengthen your willpower
If you want to be healthy, then you have to skip on the fatty foods every now and then, right? Well, if you want to save, you have to practise restraint when it comes to spending. It will be hard at first, and you may have to sacrifice eating out for Mum’s soggy leftovers, but the more you practise, the better you’ll get.
It’s as easy as asking yourself the simple question while you’re standing in line at the checkout or hovering over that “purchase” button: do I really need this?
9. Set goals (and then treat yo self)
You’ve heard the phrase ‘everything in moderation’, and the same can be applied to money. Set goals for yourself and if you’re someone who needs something to work towards, use a reward system to help you achieve these goals. Just so long as you don’t spend all the money you’ve earned on the reward, you should be a-okay.
10. If you don’t need money, don’t take it with you
Limiting your spending could be as easy as leaving your wallet at home. If you’re heading out of the house and know you’re going somewhere you don’t need cash, then simply don’t bring it.
Having money or cards on hand makes you more likely to spend it on things you don’t need, so avoid the hassle and travel without your wallet, or with money that’s strictly for emergencies only. And no, gum, sandwiches and emergency $100-jeans do not count.
11. Speaking of which, have emergency funds
We’ve all been in that situation: you find yourself stranded, possibly in the same clothes as the night before, and you realise you’re going to have to fork out a fair bit of dosh to get your sorry ass home. Always have at least a small amount of money in your account or enough cash at the ready, just in case an emergency arises.
12. Take advantage of the sales and discounts
In case you haven’t already figured it out, there are discounts everywhere, especially if you are a student! Take advantage of discount sites, apps, and sales wherever possible on everything you buy, from clothes to books, to drinks and pizza at happy hour, to cheap movies on Tuesdays to car sales to holidays.
13. There is no shame in second hand goods
There’s nothing more satisfying then getting a good bargain, and if we’re honest with ourselves, the best bargains are almost always on second hand goods. So, while you might be saying hello to tatty textbooks, clothes that smell like mothballs, chipped furniture and old cars with character, you’re waving goodbye to inflated prices.
And, if you’re not afraid of getting down and dirty, try hunting for some nifty items in council clean-ups and tips.
14. Sharing is caring
Isn’t everything better when shared? Well, not always, but when it comes to money, splitting the burden with a friend or two is always a good way to cut the cost. If you share your drinks, your Netflix accounts, your meals, even your car costs with at least one friend, then you’re already saving 50%.
15. Find something you like? Look online
If you’re a 20-something of the modern world and you have access to that new fandangle thing called the Internet, you should know that things are much cheaper online. And if you’ve ever sat in a lecture hall, you should be an expert at online shopping.
Australia is one of the most expensive countries in the world, so sometimes buying things from overseas sellers or online wholesalers can be way more cost effective. Next time you see something you like in stores, do a quick online search for the best price before you commit.
16. A lesson in loans
Taking out a loan feels like such a grown up thing to do, akin to drinking red wine for the taste of it, and figuring out how to dress smart-casual. A loan is when you borrow money from the bank in order to make a necessary, big-ticket purchase that you don’t have the funds for, like your first home or your education. After a certain time, you will be required to pay this money back, usually in instalments called ‘repayments’.
But watch your back, because taking out a loan means you will be paying interest, and probably a lot of it, so remember to only take out a loan if you absolutely have to. Because you know what else loans get you? They get you in debt.
17. Know your debt
One of the other wonderful things about being an adult is dealing with debt. HECS debt, loan repayments, in debt to your parents (possibly the worst kind), it all adds up over time. That’s why it’s so important to know your debt, know how much you owe to whom and repay your debts as soon as you can to ensure you will be able to borrow more money in the future.
18. Credit scores… eh, what?
Before you take out a loan or apply for a credit card, banks need to know they can rely on you to pay the money back. That’s where your credit score comes in. These aren’t so well known in Australia, but they are super important, because your credit score records the history of your overdue debts, bill payments and credit applications. If you’ve ever had a mobile phone plan, then you’ve probably got a credit score, so make sure it’s a good one by paying your bills on time and minimising your debt.
19. Avoid taking out loans on things that depreciate
When possible, you should avoid borrowing money on things that depreciate (or lose value) over time. Things like cars and computers depreciate quickly, which means that while you’re paying interest on your repayments, the thing you bought is actually going down in value. It’s one of the fastest ways to lose money, and ain’t nobody got time for that.
20. Do your homework
When making any kind of large money decision, it is absolutely vital that you do your research. Make sure you are going with the right provider, the cheapest price and the most reliable source. There are so many scams and dodgy services out there that want to take your money and run like the wind, but if you’ve done the research, you can always trust you’re going with the absolute best option.
FREE TIP: Money is great, but it’s not the most important thing
Sure, money might make the world go round, but you shouldn’t kill yourself stressing over money. If you’re living comfortably and can afford life’s necessities, then you’re doing a lot better than the majority of the population. Be happy with what you have and remember that there are way more important things in life than money!