5 Smart Money Moves To Make As A Woman In Your 20s
Levelling up your finances to set yourself up for a future of financial freedom
Did anyone else get to their 20s and wonder why the hell they never offered 'adulting' classes at school? If you've stumbled upon this post, chances are you're a little like me and have hit the point where enough is enough. So if you've decided to get your act together and make smarter decisions with your money, these steps below really helped me and I'm sure they'll help you too!
1. Build Your Credit
Okay so I'm starting with this one because I honestly can't believe how misinformed I was about this. Growing up, like many working class households, all the negatives of money, credit cards and debt were hyper-visible to me. The positives, not so much. As an 18 year old, I decided to avoid any sort of 'borrowed' money like the plague. Throughout university I didn't even have so much as a £50 overdraft because I was so scared of getting into financial trouble. To an extent, this was a good thing because I didn't come out of uni with a tonne of debt on top of my student loans. However I realised far too late, that having no credit history wasn't a good thing. It meant my credit score was incredibly low and I was unlikely to be approved for anything from credit cards to monthly contracts, much less a house or financed car. So how did I build my score and use credit in a positive way? I started off with a credit building program called LOQBOX which allowed me to take out a 'loan' and pay it off monthly, which they reported to credit agencies to let them know I was paying regularly and on time. I set up direct debits for all my utilities, registered on the electoral roll and paid off my laptop 6 months early. The most important thing is figuring out your current position, deciding where you'd like to be and then getting intentional and strategic about how I you're going to get there. I can proudly say I managed to take my credit score from Very Poor to Good, without ever owning a credit card!
2. Avoid Buy Now, Pay Later Schemes
Speaking of using credit in a positive way...Klarna ain't it. Don't get me wrong, I've definitely fallen for the trap of Buy Now, Pay Later schemes before and it's enticing thinking about essentially getting clothes for free. But it's never free and it can't just be me who's noticed that the payment deadlines always come at the most inconvenient times. Whenever I would use any of these schemes it was usually towards the end of the month when I was low on cash but wanted to buy the entire New In collection on Pretty Little Thing. I soon realised that if I was low on cash on the 25th of September, that would also likely be the case a month later when it was time to pay and essentially I was just postponing the inevitable (and causing myself anxiety for no reason). So now I avoid it altogether and if I don't have the money in my account, I simply can't have the things. If you're interested in learning how to shop more sustainably, you'll love this post!
3. Master Your Money Mindset
Another major factor to levelling up my finances was changing my mindset. As I mentioned before, I grew up with a lot of negative mantras towards money (it doesn't grow on trees, it's the root of all evil etc.). Naturally, I was gonna have a hard time attracting something that I was basically afraid of deep down. So I started reading books such as 'You Are A Badass at Making Money'. I replaced negative mantras with a new one that even my friends and family now use. I challenged my ideals on financial freedom, took inspired action and practiced gratitude for everything I received. What I learned was that mindset was half the battle. Read my full blog post on how I changed my money mindset, HERE!
4. Set Savings Targets
So by now you've probably realised that levelling up your finances in your 20s is for the most part about being intentional. Before doing all these things, my savings were literally just whatever was left in my bank account at the end of the month (if anything). I didn't have any real motivation for saving so I often just looked at my savings as spare money for if I ran out. To stop myself from dipping into my 'reserves' every month, I set myself some targets and goals to make saving more of an incentive. Instead of having a savings account I could withdraw from and add to several times a day, I set up a Help To Buy ISA as an incentive towards buying my first house. I can only pay into it once a month and had to set up a standing order which helps me stay consistent in paying myself first. I also get a warning anytime I go to withdraw from it which majorly put me off from doing so and essentially makes the account 'untouchable'. What's important is making saving as easy as possible for yourself and making it as hard as possible to touch it again until you really need it.
5. Invest In Small Luxuries
Now so far all of this financial talk has been about saving here, resisting there but where's the part about living your best life?! I hear you, so here's the fun part of all of this. Being smart with your money doesn't have to be restrictive. I choose to invest in the small luxuries that make me feel my best and treat them as part of my monthly expenses. By adding a few luxuries to my budget, such as getting my nails done or eating out at least twice a month, I don't feel like I'm missing out on anything. This makes me less likely to go on an impulsive shopping splurge because I haven't treated myself in ages. We all need a little enjoyment to keep us sane, especially during these times so don't feel guilty for spending on one or two non-essentials. If something is a non-negotiable to your lifestyle, work it into your budget and leave the rest behind.