2021 is the year to build healthy habits
Your 20s is the perfect time to set up a foundation for healthy financial habits. If you’re fresh out of school, Uni or Tafe, it’s probably the first time you’re making serious money and we know how tempting it can be to spend like there’s no tomorrow. But with some careful thought and a little bit of planning, you could create some great habits. Your future self will thank you for it!
1. Control the spending!
Ok, you splurged outrageously, that’s OK, but now it’s time to think about your money a little more. A great way is to create a budget, and decide where to spend your money and keep track of how much you’re really spending in certain areas. Remember, it’s okay to splurge, but keep a savings plan in mind too. MoneySmart have some great tips on how to create a budget.
2. Create an emergency fund
Things may be great now, but you always need a safety net to fall back on in case things get tight (and that means your safety net shouldn’t be your parents!) When your car registration comes in, usually not long after you get hit with insurance and a phone bill… they say these things come in threes! It’s good to have a buffer for those unexpected bills that may otherwise blow out the budget.
Treat this account like a fixed expense, like your rent or repayments on a loan, and watch the balance grow.
3. Take advantage of time
The younger you are, the more time you have for your money to grow. And with your super balance you have the ability to take advantage of compounding interest. Compound interest means that at the end of each time period the accumulated interest is added to the principal before calculating the next period’s interest. So, the sooner you start, the more potential you have for your balance to grow.
There are many ways you can make your money work harder for you, and you’re not expected to know them all. Let the experts handle that. If you’d like to have a chat with us about how to make your savings grow, call us on 1300 300 820 Monday to Friday 8:30am to 5pm.