Financial advice we wish we’d followed in our 20’s!
In your 20’s, financial concerns are not usually a high priority. Thinking back to those days, you were probably more concerned with socialising, studying and just getting by from day to day. Fast forward a decade or so, what advice do we wish we followed back then?
Jill – Live at home and save as much as you can
Sure, living with the parents may not be cool, but with the average cost for a shared accommodation in Perth being around $250 per week, by living with your parents, you might be saving over $13,000 a year on rent alone! Living at home can also save you money on basic utilities, TV/phone/Internet expenses, and even subscription services like Foxtel or Netflix. So be nice to your parents, cook the odd meal, and hopefully they will let you stay as long as you need.
Lisa – Create good debt and avoid bad debt
The first debt people often experience is a credit card or store card. These are often the easiest to obtain in your 20’s and seem like a great way to satisfy spending urges quickly. Credit cards are bad debt. That is, they will not do anything to help your future financial position. A home loan on the other hand is an example of good debt that will help you to grow additional assets and/or income in future.
Garima – Save money today and money will save you tomorrow
Have a budget. Not only to keep a handle on your spending habits, but also to track your savings. If you maintain a savings account, you don’t need to worry about a credit card for emergencies. You have a backup fund to handle any situation. It can be very useful to set a savings target each month in your budget. If you are persistent, saving as little as 10% of your income each month, can be a huge benefit in the future.
Bruce – Invest in property early on
Yes hindsight is 20/20, but if only we had all brought property sooner! Property markets do suffer from yearly fluctuations and not always in our favour. However, over the long term property can be a very effective way of building wealth. Owning investment properties can help build equity and income which can then be used to fuel your asset growth.
Asher – Use an offset account from the start
It may seem unusual to put all your pay against your mortgage, but don’t worry, you can still access it for all of your day to day needs. An offset account saves you money by reducing the interest that you pay. Even if you are saving up for something extra like a holiday, leave the money in an offset account until you really need it. Having your money in an offset account is more beneficial, as you generally earn less interest on a savings account than what you would save on your home loan. In addition, you have to pay tax on any interest that you earn in a savings account.
Jason – Educate yourself on financial matters as early as possible
When you’re a student, you have much more time than someone who is working full-time. So use that time to learn the basics like budgeting, investing, and so on. That way, when you start working, you will have a clear understanding of what to do, while others are still struggling to learn.
If we were given this advice all those years ago…would we have listened?
We’d like to think so!