The financial choices you make in your 20s can have lasting effects on your future. But it’s also a time of finding balance and experiencing various life milestones. This may be starting your first professional career, moving for work, creating a business, having children, getting a mortgage, and more.
Whatever your plans and goals, it is important to start right and take control of your finances to help make them happen. It’s important that you are supported to make the best possible financial decisions that will positively influence your long-term financial wellbeing. At North Shore Budget Service, we’re here to help. Here’s 6 tips to make in your 20s….
- Develop good budgeting habits
Start by tracking your cash flow – that’s the flow of money coming in and money going out. As you start paying better attention, you can start to spend and save more intentionally. Prioritise your essentials, and know how you’ll pay for housing and food.
- Pay down debt
If you have a student loan or a credit card balance, look for ways to pay it off. That means reduce your spending then reroute those funds toward paying off your debt. Hold yourself accountable by building payments into your budget and automating them if possible.
- Automate your savings
Want to save for a trip? A house? A new car? Or your retirement? Yes, we know you’re in your 20s but it’s never too early to start planning. Set up a fund or separate account and send automatic transfers from your bank account and/or pay to that account each month.
- Build good credit
With a good credit score, you’ll get lower interest rates when you need to borrow money, so you’ll spend less over time on large purchases like cars and a home. Paying off your credit card balance every month and making loan payments on time are good way of improving your credit score.
- Start saving for retirement
If you are working, you can opt in to KiwiSaver, which is a voluntary savings scheme to help set you up for your retirement. You can make regular contributions from your pay or directly to your scheme provider. You can also start your own little savings nest egg. No matter how small your contribution feels right now, the account you set aside for your retirement can grow exponentially thanks to the power of compound interest.
- Work toward owning your home
Not easy in this environment, we know. However, if one of your goals is purchasing your first home, then you need to work this into your financial plan. Start saving for a down payment.
