Then there are those new responsibilities. Getting a work-life balance, finding a good place to live, and managing your own money, for starters.
Taking control of your finances is another but while it can be tricky, it comes with its own rewards. So if you’re a 20-something, or have one in the family, read our list of financial habits to get into before you hit the big 3-0…
1. Budgeting is a great financial habit – here’s how to set oneMany younger people today have a unique set of circumstances and choices to make: many have student debt, while high property prices make buying a home harder.
That’s why creating a budget matters. Sticking to it can mean you live comfortably within your means, and hopefully leaves you enough to save for the future.
To create one, add up all your income from employment and other sources, then do the same for monthly expenses. Include any debt, all basic living expenses such as rent, travel and food – and don’t forget entertainment, you need some fun too!
Subtract your expenses from your income to see what you have left each month: you can then decide how any extra can be saved.
Expenses more than your income? You’ll need to figure out how to cut your spending, or increase your income. Read more on this from four expert money coaches in our article.
For more ideas on budgeting, try the Money Advice Service’s guide to managing your money.
2. Have clear goalsOnce you’ve got into the budgeting habit, it can really help to set some clear saving goals – and work towards them.
Putting money aside for a rainy day is a good way to prepare for any unexpected expenses.
If you’re saving towards medium or longer-term goals – like a deposit on a home or a special occasion – a tax-efficient ISA (Individual Savings Account) can be a good way to save without having to tie up your money long term, depending on the type and terms you have.
Read more in our article What’s an ISA, who are they for and when should I consider one?, including about the Help to Buy ISA and Lifetime ISA, which offer a bonus on top your savings if you meet certain criteria.
3. Save into a pension – yes, reallyWhen you’re young, retiring can feel like a lifetime away – which it is, of course! But think of it this way, if you start now, you could build up some serious savings.
The good news is that employers need to provide a workplace pension scheme to all eligible employees. It’s important to find out what your employer offers because a pension can be a very tax-efficient way to save – and there are other benefits.
Your employer will be paying towards your future too. For many people the amount their employer has to contribute actually went up this year.
If you’re not a member of the scheme your job offers, you’re missing out on money from your employer that you’re entitled to – so think carefully about joining. If you set up a pension early and regularly pay into it, the amount could really add up by the time you’re ready to stop working. Read more on the benefits of a pension here.
4. Understand the jargonUnderstanding money gives you the best chance of making good decisions about your finances.
For example, many people confuse ‘saving’ and ‘investing’. So what’s the difference?
Investments are something you buy or put your money into to try to make a profit in the future, although there’s no guarantee and you could get back less than you invested.
You might not think you’re investing, but if you have a pension or a stocks and shares ISA, you are. So it makes sense to understand how it all works.
‘Saving’, on the other hand, is where you put your money into something like a savings account, and you know the rate of interest which will be applied. You’ll normally get back what you’ve saved plus interest on top.
We gathered some of the most common financial terms to get to grips with in Farewell to financial jargon: 8 common money terms explained and our simple guide to investing terms
5. Use your tech to manage your moneyMaking the most of your money doesn’t have to mean piles of paperwork. For a lot of people today it means managing their money online and on their phone.
The internet is full of resources with sites like the Money Advice Service website offering free and impartial money advice. If you’re time-poor, podcasts are a good way to get financial inspiration while you commute or work out – try Cash Chats, an interview with a different money blogger each week.
Or subscribe to email newsletters like the one from Money Saving Expert if you want to get up-to-date savings tips.
You can give your savings the tech treatment with apps like Plum or Monzo, or Moneybox for investing. Some even let you ‘round up’ transactions you make to the nearest pound and put the extra pennies away for the future, such as topping up your pension or ISA.
Read more tech-savvy ways to save or read how other people your age are approaching their finances in Real-life millennial money.
Elle Tucker is a freelance journalist writing on behalf of Standard Life.
The information here is based on our understanding in August 2019 and should not be taken as financial advice. Pensions and stocks and shares ISAs are investments and their value can go down as well as up and they may be worth less than was paid in. It’s important to note that laws and tax rules may change in the future and your own personal circumstances will have an impact on tax.
Standard Life accepts no responsibility for the information contained in the websites referred to in this article. These are provided for general information only.