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Five ways to build your savings in your 20s

Five ways to build your savings in your 20s

When you’re in your twenties, the world is your oyster. Even if you’re fresh out of university and saddled with HELP debt, opportunities are rife. You are likely have more freedom than you have ever had before or will in the future, when you buy into investments like property and start a family. 

It’s a great time for adventure, but also for planning your future. Many people in their twenties already have one eye on a home loan and buying their first home, while others are simply focusing on paying off credit cards. Whatever your situation as someone in your twenties, saving enough money for a comfortable life can seem like less of a priority. However, it’s something that can be achieved. 

Here are five ways that you can start building towards your financial goals while you’re still in your twenties. 

Stay on top of your credit cards

Whether it’s for going overseas and having an emergency fund, accessing online shopping and frequent flyer rewards or perhaps just for another line of credit, many people decide to take out a credit card in their twenties. However, managing this appropriately is going to be key to building savings. 

Use a credit card comparison tool to determine which will suit your financial situation, and only use it when you absolutely need to. Otherwise, you can spend too much paying it off, rather than adding to your savings account. 

Take advantage of lower interest rates

If you’re in your twenties and already regretting some financial decisions you have made, or are feeling overwhelmed by debt, a balance transfer credit card is one option to help pay off that debt. Some balance transfer offers may give you the option of accessing a lower interest rate, but it can also place you further into debt. Careful consideration is necessary when taking up this option.

Ditch the mobile phone plan

Using a mobile phone on a plan can be one way to rack up debt and experience bill shock. According to the Australian Communications and Media Authority, 34 percent of telco consumers in the year to June 2015 experienced bill shock on their post-paid plans. And of this group, 26 percent got a bill that was at least $200 more than expected.

Using a pre-paid mobile plan may allow you to save money, putting it aside for a later date. Given that ACMA data shows 54 percent of adult Australians with no landline but a mobile phone are in the 25-34 age group, this will be vital for people in their twenties. 

School up on your taxes

Unless you did an economics degree, you might be lost when it comes to taxes. However, many costs (especially related to your income) can be claimed back as deductions, giving you more savings. This can include transport costs, work-related clothing, tools and education.

Filing your taxes yourself, or with the help of an accountant, can yield generous benefits that add to your high interest savings account balance. 

Don’t sacrifice your super

You’ll already be making mandatory contributions to your super as you work and earn, but have you considered adding extra to your super fund? Alongside government and employer contributions, this fund can quickly build up. Talk to your financial advisor or account about how to make the most of compounding interest within your super.

And if you have multiple super funds sitting around consider consolidating them into one. Doing so can cut down on the amount of paperwork you receive, make it easier to understand and might even save you money on fees.

Living life to its fullest is important, but so is protecting your future. Building a solid savings account while you are in your twenties is a great way to get ahead. 

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