Financial Advice for 18-25 Year Olds
By Dewi (Dee) Chan, Financial Advisor
This is my first article in a series that I will publish in the coming months on a variety of topics. I will share my experiences over the last 10 years; from landing my first ‘real’ job all the way to getting married and my recent journey as a new mum. I hope you enjoy them! If there are any other topics you would like to hear about specifically, please feel free to contact me with your thoughts.
Some of the learning I gained while at my first job and earning a regular income for the first time, I learned the hard way.
I would like to share with you some of my do’s and don’t’s when it comes to spending.
My top 6 financial tips:
1. Write down your spending and be honest about it.
Make sure to include how much you spend on drinks on the weekends, takeaway with your mates and those expensive handbags, golf clubs, shoes, etc.
2. Save at least 20% of your income directly into a savings account you can’t touch.
Go and open a bank account where you can’t withdraw it online or remove it from your online/ mobile banking. It is amazing how quickly that 20% will add up.
3. Stay at home for as long as you can.
My older clients may not thank me for saying this, but truly this is something everyone under 25 should consider. Share-houses can be fun but also have limitations; including paying your own bills! Forget about saving money and going on holidays if you can’t even afford to pay rent and buy groceries. In many cases, I’m sure your parents would prefer you to be at home anyways.
4. DON’T fall into the credit card trap.
It is very easy to rack up credit card debt and get into a situation where you are unable to pay it off at the end of the month. Set yourself up with a Visa Debit and attach it to your savings account. This way you know how much you can spend on a night out or whether you can afford that new pair of shoes.
5. Set a goal for yourself.
This is important. If you have set up to save 20% of your pay, make sure you have a specific goal tied to it. Whether it’s a Contiki trip to the US with your mates, a deposit for your first home or buying a new car – set a goal.
6. Find out how much your Higher Education Contribution Scheme (HECS) debt is.
If you are like me and your parents didn’t pay your Uni fees, make sure you plan your future expenses around this. Remember, the more you earn, the more you pay and the quicker you will pay it off.
I hope you find these 6 tips useful. The last thing I would say is – it is never too early to sit down and look at your financial plan. Please feel free to contact us if you would like to discuss your plan.
Dewi Chan is an authorised representative and credit representative of AMP Financial Planning.
Blueprint Planning Pty Ltd (ABN 78 097 264 554), trading as Blueprint Wealth, is an authorised representative and credit representative of AMP Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee. This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider you financial situation and needs before making any decisions based on this information.
