5 money things to learn before you're 21
1. Habits will rule your life and your money
You need to not get into the habit of buying now and paying later. This is cancer of the wallet and harms more people than it helps. Don't outsource your money management to 4 easy payments, learn yourself. The best way to form good money habits is at the start of your income earning life. Many people get into the credit cycle and can’t ever get out as it’s too hard. The best way is to never get in the habit to start with!
2. Your first investment should be in yourself
It’s totally fine if you use the first 5 years or so years or adulthood to study or really find out what drives you. Don’t be too concerned with trying to invest as fun as it sounds – just focus on you. It’s also OK to finish uni with little money saved as long as you can stay out of debt (with the exception of HECS/HELP) and hustle your way through. Use this time to try and get by with the little money you may have!
3. Keep your cash flow lean and agile like a start-up business
It’s like you’re the founder of YOU incorporated. A new business that needs to grow and scale. You’re not over-committed, signing up to big leases and employing staff in your new business. So, with your own financial life; keep your cash flow lean and able to adapt to any changes that might pop up in your early 20’s. This might mean a cheaper outright phone purchase and no contract or no car loans.
4. It’s OK to have two separate banks
As we need to hack our behaviours and habits, why not set up a bank account for bills and any other income that you have and with another bank use a card that is just for day-to-day expenses like food, fuel, going out etc. Then set yourself an automatic payment from your bills account to your spending account each week. Don’t have the bills bank/account on your phone and only carry your spending card with you or on Apple/Google pay. This may stop you from overspending!
5. Look for ways to be sustainable
Since you’re just starting out. Why not start well. Look for ways to be sustainable. Decide that you’re only buying from brands that do not exploit people, maybe you only use a reusable coffee cups and you also look at sustainable clothing either by using op shops, markets, clothes swaps or buying local hand made quality items if your budget permits.
