In our early twenties, life is about making the most of the present. It’s about wearing little dresses and drinking on weeknights. It’s about spending everything we earn and not feeling guilty about it. It’s fun and it comes with little worry or real responsibility.
I’ve loved my 20s, so far, but as I move into the latter half of the decade, I sense my mindset is shifting. I’ve begun to feel a slight pang of pressure. No, anxiety. It’s an underlying level of panic, really, that I may not be able to use the excuse, “I’m young, I have all the time in the world” anymore. Suddenly, my decisions feel like they’re carving the direction of my future.
Sure, I can laugh at some of the decisions I’ve made over the past decade—pedal pushers, popped collars, nail piercings (they happened, don’t pretend like you don’t remember), Dave Leston—because I know they’ve had little impact. But others, like my finances, don’t seem so funny.
Don’t get me wrong, I haven’t invested in the Wine Bottle Glass or gambled away my future or anything. No, what I have done is nothing. I’ve made no smart money moves and I regret it. That being said, I also know it’s not too late.
So for all the 20-somethings out there, it’s time to be financially savvy. And I’m not talking about the patronising, “stop buying shoes you don’t have space for and ordering espresso martini” bullsh*t. No, we spoke to Financial Literacy Educator, Michelle House for some real life practical advice, and here’s what she said.
It might not seem like an issue now but your credit rating can significantly impact your future. “Ensure you pay your electricity and phone bills on time so when you’re ready to purchase property in your 30s, you’ll have a healthy rating that doesn’t leave any opportunity for lenders to doubt you,” says House.
“Research by Choosi shows Gen Ys are becoming more resourceful when it comes to saving money but putting money into a savings account isn’t enough. It’s still important to identify what you’ll do with that money. Having concrete goals such as a trip around the world or buying your first home can help you stick to saving, especially when you know what you’re working towards.”
7 out of 10 couples say money adds tension in their relationship. We’ve written about the awkward conversations every couple must have and this is certainly one of them but once you’ve had the first discussion, House says it’s good to check in every month.
“It is very likely that you and your partner will have different views on managing money. A money date is time set aside for each person to share their thoughts on how they want to manage finances as a couple. Having these conversations early in the relationship will prevent surprises later on when you want to make shared investments like buying property, saving for a wedding and so on.”
Raise your hand if you’ve ever gone wild online to realise you’ve reached the hundreds in your virtual shopping cart. Guilty. “Online shopping may be convenient but consumers pay a massive price when they buy online. Because we aren’t physically connected with the money, it’s much easier for us to tap and spend,” says House. “Your 20s are a great time to set up healthy money habits. There is still time to make and learn from your mistakes.”
If you’re still living life through student’s eyes, this one can be harder said than done. However, according to Michelle, looking beyond the price tag and paying a little extra for something that’ll last longer will help you save in the long run.
“When it comes to shopping for clothes, electronics, cars, many people will look for the best price. What you want to focus on is finding the best value. There is short-term satisfaction in getting something at a bargain price but it’s important to make purchases that will stretch long-term.”