In your twenties the world is your oyster. There is a lot of time ahead to make and save money, so when you have it you want to spend it, right? As a result South African youth is spending their money on the things in life that are important to them now: traveling, experiences, fitness, clothing etc.
It isn’t wrong to spend money on these types of things; however, the earlier you learn good financial habits the more money savvy you will become.
Here are the 5 money habits you should cultivate in your 20s so that the future you can thank you for it.
1. Learn how to budget
Living on a budget teaches you to live within your means, cultivating a habit of only buying what you can afford.
2. Pay off loans & credit cards
If you have a credit card you should get into the habit of paying off your balance every month so that you don’t have to pay interest. Pay off your student loan as soon as possible too.
3. Create money goals
Define what type of person you will be when it comes to money. To do this you will need to set short-, medium- and long-term goals i.e. buy a car (short-term), travel to Italy (medium-term) and buy a house (long-term). Goals help you realise the importance of every cent you earn.
4. Start saving for your short-, medium- and long-term goals
Start various savings/investment accounts and get the money (even if it is a small amount at first) deducted automatically every month. Together with your goals, savings help teach you commitment, which is an invaluable life skill.
5. Invest in your professional self
A habit that is very important for you in your 20s while your monthly expenses are still not that high is to invest in your professional self. Invest in your education through enrolling in additional courses that interest you or training sessions that will add value to your career goals.