Financial planning for Generation Y
4 money goals to aim for in your 20’s
Are you a twenty-something who gets stressed out about your personal finances?
Don’t worry – you’re not alone!
You’ve made it through your education and have landed your first ‘serious’ job. And now it’s time to learn how to manage your money.
But what should you focus on first?
Here are 4 money goals to aim for in your 20’s.
1 Look at your daily spending habits
Feel like you get paid well but you never have enough money?
It’s a common problem for Generation Y when they enter the workforce.
With rent, transport costs, clothing and entertainment, it can feel like you’re working hard for nothing.
Start by tracking how much you’re spending every day.
Include all your expenses like:
- your breakfast smoothies on the way to work,
- any coffees you buy,
- travel costs like train tickets and petrol, and
- your lunch expenses.
When our Generation Y financial planning clients do this, they’re often surprised that they’re spending nearly $50 a day on food!
Cutting back your daily spending doesn’t have to involve a switch to instant coffee or eating 2-minute noodles every day.
Instead, consider making your lunch for 3 or 4 days a week and making your breakfast smoothie at home.
2 Have an emergency savings account
Unexpected expenses will happen in life!
From your car needing repairs to your cat needing an emergency operation.
And when this stuff comes up, it’s handy to have some cash reserves available.
Not sure how to accumulate around $1,000-2,000 in an account that’s only to be used in emergencies?
Start by setting up an automatic transfer from your pay account to an emergency savings account.
A $30 or $50 deduction every week will quickly accumulate to a healthy emergency savings account.
3 Take out insurances
Worst case scenario thinking can be a downer!
But life can get complicated really quickly if you don’t take some time to think about the ‘what if’s’:
- what if you forgot to turn off a tap in the morning and flooded your apartment?
- what if you got injured and couldn’t work for a few months?
- what if you couldn’t go back to work in the same job and had to re-train?
There’s a range of insurances that we advise our Generation Y financial planning clients to consider including income insurance and life insurance.
4 Start investing
Have you ever heard your parents talking about how much they paid for their home – all those years ago?
Do you know how much it’s worth today?
Property may not interest you and shares may hold no appeal, but starting an investment plan in your 20’s will help you live the life you want, not live the life you can afford.
Getting financial advice now can help you sort out where to invest your hard earned money. Taking the time to get organised now, can make a huge difference to your financial health down the track.
Call our friendly, expert Financial Planners in Lilydale, Melbourne’s eastern suburbs on 1300 296 388 or email us here.
The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here.