One of the most important lessons to learn during your 20’s is how to get your personal finances in order (a.k.a, get your sh*t together!). I was brought up to know the value of money pretty early on, and my parents’ frugality definitely has paved the way for my own (thanks mum and dad). I can definitely say now though that I’ve improved my finances during my 20’s.
But after studying finance (even though I never did a personal finance course), I realized that once you gain control of your finances and ACTUALLY understand what you can do with your money, I was hooked, and that definitely fuelled the passion for this blog with Julia (who practically has the same brain as me).
I’m known to my friends and family as being that one who is really good with their money and clued in. I’m a control freak, which is probably a good thing when it comes to budgeting.
Your 20’s are a time for growth and while we love to quietly deny that we can just spend, spend, spend all the time, it is the PERFECT time to develop really good habits.
6 ways I’ve improved my finances during my 20’s
#1 How to Budget Properly
The word ‘budget’ I think carries a fair bit of negativity. As soon as I hear the word budget, I immediately think ‘restriction’, ‘saving’, ‘priorities’…’don’t buy that donut’…(I like donuts). I was never taught to budget in high school (I wasn’t really taught anything that would help me in life during high school), but this is probably one of THE MOST CRUCIAL elements of personal finance to get in order in your 20’s.
I’ve been trying to train my mindset to not see my budget as a restriction. It’s simply telling me where my money is spent and what I prioritise…(turns out I prioritise food a lot).
Yes, you still need to manage your lifestyle accordingly and say no to things you actually can’t afford or haven’t prioritised, but you also need to live a little.
Some of you may disagree with me (especially those who have debt). I like to go out with my boyfriend on a Friday night and have a nice dinner. It’s our thing, and probably one of the only times I actually get to wear makeup and a dress.
*If you need an in-depth guide on budgeting, we’ve got an amazing step-by-step tutorial on how to budget. Click the button below to get your FREE copy!
#2 Invest Early On In Your 20’s
Man I wish I had done this years ago!! I’m now 26 and only started investing in stocks last year. I’m pretty risk averse and I’m totally ok with that. I didn’t learn about investments until I was in uni, and that’s where it peaked my interest. But not everyone does a finance degree and has the chance to learn in that environment. Which means, it comes down to self-education. Books on investing are probably the easiest way to start self-education. Or go find yourself a trustworthy financial advisor.
Some people will most certainly disagree that investing is a good idea, and it’s usually those who have tried it and lost a lot of money. I’ve lost money (not a lot), but it happened. I figured out for me that dividend investing was the best way to go and I only invest in what I deem to be ‘safe’ companies. Again, it all comes down to doing your research.
If you’re interested in investing, these articles below will be perfect for you!
#3 I Saved A Certain Percentage Of My Pay Check
My dad taught me this little saving secret when I was 22. He told me to open up another account (one I couldn’t withdraw from) and put 10% of my weekly wage into that account. Otherwise known as paying yourself first. THIS WAS THE BEST ADVICE I WAS GIVEN! This helped me to easily build my emergency fund and it’s a habit that has stuck with me.
Whenever I receive a pay rise, I’ll up that percentage to either 15-20%. My only problem now, is that I haven’t given this account a end-goal. Am I saving it for a house deposit? Saving up for my retirement? A European holiday? I have no idea yet and, and that’s ok, as long as I continue to do this, I’ll assign that money a goal down the road.
If you’re terrible at saving money, check out this article below for more tips!
#4 I Invested In Myself
After I finished my undergrad degree (and I’m sure many of you can probably relate) I had no effing idea what I wanted to do with my life. Like pls, I was 20 years old and graduated…who at 20 truly knows what they want to do (there are some lucky few who do)? So, I took 2 years off to soul search and applied for a job in a big consulting firm.
I made it to the last round of interviews, but did not get the job. I was so upset, but it was purely because I didn’t have enough business knowledge. So I thought myself ‘I’ll fix that!’. I went back to uni to start a Masters of Business, did a finance course, fell in love and changed my degree
And no, not all of that was on a student loan. $25,000 came straight out of my pocket to pay for half of it. I worked my butt off during uni so I could do this (and working nearly full time hours on casual pay helps as well).
Now, I could have saved all that money up towards a house deposit, or a car, or something…but you wouldn’t be reading this blog if I’d done that.
So dear millennials, the best thing you can do is bet on yourself! And never feel like you wasted money doing something. My bachelor degree was in Social Science and was a very expensive $84,000 degree. Did I do anything with that degree? Hell no! I did not want to be a psychologist. But do I regret it? No way. And while this is something that may not have improved my finances directly (hello massive student loan), it improved my saving habits and taught me that any financial goal is achievable if you are 110% determined to reach it.
#5 I Enjoy The More Frugal Lifestyle
Yes, I actually enjoy it! When I was living off my redundancy package for a while, I was trying to find activities that were either incredibly cheap, or free that would give me fulfilment and happiness. This mainly involved going to hikes, or walks along the beach with my boyfriend, and just enjoying the outside. I know it’s cliché, but when I’m outside I feel happy and free. I feel adventurous and intrigued. And I also love the feeling of enjoying myself and not having to fork out money to do so.
#6 I Prioritise My Wants
I never used to do this, but now I prioritise what it is I truly want. Whatever it is I truly want, that is where I plan to put my money. Now, like I said, I spend quite a fair bit on food (and I’m REALLY trying to reduce that).
While I was in uni, I used to prioritise my wardrobe. I ALWAYS had to look good at uni, do my makeup, wear really nice clothes etc.
However, once I left uni and started working, my priorities changed. I suddenly had a work uniform so I didn’t need to really think about what to wear. I didn’t wear as much makeup so I stopped spending money on expensive makeup products (I probably compensated by buying expensive skin care products but hey, I wanted nice looking skin).
And now that I’m a year and a half out of uni, my priorities are my business ventures, my health, and my financial future.
I rarely buy an item of clothing, I’m even trying to reduce the size of my wardrobe! What I will do when I need to though, is buy quality items that I know will last me years. I no longer love fast fashion as most of those items I’ve bought, have ended up being sold, or given away.
The key is to take the time to reflect and actually think about what it is YOU prioritise. Things then become a lot more simpler and your financial goals will have more focus.
I’m posing this question to you now lovely readers! Write the question ‘how have I improved my finances during my 20’s?’. It’ll help you see how far you’ve come on your financial journey and get you thinking about the future.
If you’re craving a few more tips on how to better your finances, click on the article below!
I want you guys to share and leave a comment with ONE thing you’ve done to improve your finances! Go!