6 smart things to do with your money in your 20s (without boring yourself silly)

Senior News Journalist · 23 February 2018
Your twenties often mark your first taste of freedom and financial independence. But while it’s fun to bask in the extra cash flow with new foods and exotic overseas trips, it’s also a great time to set yourself up for the future.

That’s why we have put together a list of some of our top financial ‘to-dos’ for one of the most pivotal decades of your life.

to do list in your 20s

1. Spend less than you earn

Pretty obvious, right? But learning to budget, and having the discipline to stick with it, is one of the most important life lessons for someone in their twenties.

These years are the perfect time to get into the habit of putting some money aside every pay, rather than living paycheck to paycheck. When you need to (inevitably) make a big purchase like a house or car, your future self with thank you for those savings.

Canstar’s Group Executive of Financial Services Steve Mickenbecker advises it’s worth trying to save 10% of your take-home salary where possible. Every. Dollar. Counts.


2. Tackle credit card debt

Credit card debt can be a real financial drain, so it’s important to clear that debt as soon as you can and make informed decisions about your spending. No one wants to spend their twenties held back by debt.

If you are struggling to clear your credit card debt, it could be worth considering a balance transfer or switching to a low rate credit card. You may be able to reduce the amount of interest you pay, freeing you up to clear the debt faster and live a little.

If you’re looking for a balance transfer credit card, you might want to consider one of the low rate credit cards with no annual fee on Canstar’s database. You can see a snapshot of the ones with links to providers’ websites in the table below, sorted by purchase interest rate (lowest-highest).

3. Reduce your HECS-HELP debt

The HECS-HELP Loan Program enables Australians to further their education after high school and pay the fees back once they start earning a certain amount.

It might seem convenient to let your 100% interest-free HECS-HELP debt drag out, but it’s a smart move to pay it off in your twenties if you can. The student loan is subject to inflation, meaning your debt can increase slightly each year.

Of course, you might have other debts to pay as a priority over your HECS, so ranking your debts in order could be a good place to start.

4. Start an emergency fund

20s guide - emergency fund

In a perfect world, we would all be fully prepared for the unexpected. Unfortunately, that’s just often not the case – this is where emergency savings come in and can make a huge difference.

Ideally, it’s a good idea to build up enough savings to cover three to six months of expenses in case you are ever out of work. That might seem like a lot of money if you are in your first full-time job, so start with making sure you have at least $1,000 in savings and continue to grow that emergency fund from there.

5. Track your spending

Keeping track of your spending can help you stay accountable and on track with your savings goals. You might also notice areas where you need to change your spending habits and improve your finances.

It’s easy to stay on track with tools like ASIC’s TrackMySPEND app which allows you to keep a record of your household budget, costs for special events, work and travel expenses, as well as cash expenses like coffee or lunch.

6. Think ahead about your retirement plan

If you already have some savings to spare, you could consider contributing that pot of extra money straight into your superannuation fund. Alternatively, you could ask your employer to put some of your take-home pay directly into your super account through salary sacrificing.

It’s also a good time to consider looking for a super fund that allows you to invest in riskier growth options such as property and shares, as these have the potential to deliver higher returns over the long-term.

While we’re on the topic of planning ahead, it’s easy to find yourself with multiple super accounts in your twenties if you’ve worked multiple jobs while studying and kick-starting a career. Consolidating your super now by moving it all into the one fund means you’ll likely pay lower fees and it can be far easier to manage.



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This is an excerpt from our new guide 20 Smart Things To Do With Your Money in Your 20s, where we provide must-read tips on how to stay on track with your finances during your twenties. To receive your copy, fill out the form below.


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