Eight things women in their 20s should know about cash
You’ve left home, maybe finished university, and you’re starting to earn what might be your first serious salary - but that also means you’ll have rent and bills to pay and a student loan to pay off.
Throw into the mix the fun side of the freedom of living on your own, nights out, once-in-a-lifetime holidays and weekends away… and you’re left with a budget to finely balance.
The scales need to be carefully measured so you have the resources to pay for any unforeseen events - no one ever plans for their car to break down or their mobile phone to be stolen. You’ll also need to keep an eye on your outgoings to stop yourself ending up in debt.
Owning your own home, or even stopping work and retiring, may not be at the top of your to-do list right now - but they’re also worth being aware of and planning for financially, too.
Here we look at eight important things to do right now with your money, to make sure you’re financially set up for the future.
Pension contributions are usually most valuable benefit available at work
If your employer’s giving it away for free, take it!
You’ll be earning wages, but it’s also worth checking out any workplace benefits on offer.
The biggest, and usually most valuable, will be pension contributions, and most employers will match or beat anything you put in.
There may also be discounts on travel - buying a season ticket is usually cheapest and if your employer buys it in advance, you’ll then pay this back in monthly instalments over a year.
Make a budget - and stick to it
Listing everything you spend money on and comparing it to your earnings isn’t the most exciting task, but it’s worth it.
Plus, long gone are the days of doing this by pen and paper; there are lots of apps which will track your spending automatically and can be linked to your financial accounts.
Some will even automatically divert any extra money left in your current account into a savings pot to put towards bigger expenses.
Test your MasterChef skills on your friends
Most of your friends are in the same boat, so work together and plan fun, budget-friendly ways to socialise.
Taking turns to host meals, and using discounts and vouchers when you do go out, are good ways to keep hold of your hard-earned wages for a little longer.
Start an emergency fund
If money’s tight, and you haven’t got lots to set aside for a rainy day, focus on having a small amount saved for emergencies.
This should cover anything from having your wallet stolen or your laptop breaking to, in the worst-case scenario, losing your job.
Aim for three to six months of your usual salary, but remember anything saved can help – something really is better than nothing - and put it in an easy-access account paying interest.
Pay off your debts
If you’ve got debts, focus on the most expensive.
You may not be able to clear them all, but you can reduce the amount of interest you spend on them, which will help in the long run.
Transferring an expensive balance to a credit card with 0% interest is a good start, but just make sure you’re able to clear the debt in the interest-free period and check about any transfer fees.
The best balance transfer credit card deal depends on your current personal circumstances, including your credit rating.
To find out which cards you’re likely to be accepted for before you apply, why not try Compare the Market’s credit card eligibility checker?
It’s a way of seeing what deals you might be eligible for, without impacting your credit score.
You’ll still have to pay, even if it’s at a later date
Buy Now Pay Later (BNPL) is everywhere and it’s tempting, but if you can’t afford the full cost now, you’re probably not going to be able to pay it when it’s due.
Avoid using credit as much as you can and look for cheaper alternatives. Second hand, vintage and swapping clothes with friends are all ways to cut back - plus they’re good for the environment, too.
If you’re struggling to pay back a loan or credit card, speak to your provider first.
Don’t be afraid to ask for help
If you’re struggling to pay back a loan or credit card, speak to your provider first.
Times are tough and credit providers understand the impact of the cost-of-living crisis and they should be able to help you to make payments you can afford.
Avoid making late payments or missing repayments altogether at all costs, as they’ll be marked on your credit score.
Keeping money worries to yourself is a constant worry and can impact on every aspect of your life, so talk to a trusted friend if you’re having problems.
There’s also lots of free and independent organisations and charities who can give you advice if you’re in a tight spot financially.
Find out where to go with our special feature Comeback Crescent.
Protect your belongings
Contents insurance may seem like an unnecessary cost to add to your list, but it can save you hundreds or thousands if your things are broken, stolen or damaged.
If you don’t own a home, contents insurance protects everything you own - from your electronics to your clothes.
You can add what’s called personal possessions cover to your policy, so anything you take out of the house - your jewellery or bike, for example, are also covered if something should happen.
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
