There comes a time in every twenty-something’s life where you suddenly realise it’s not possible to financially sustain yourself as a fully grown child indefinitely.
In short, you need to start making some adult decisions.
I know, adulting is hard, especially when it comes to money (or a lack of it), but it doesn’t have to be that way. Here are five money matters you need to have figured out before you hit thirty.
1. Prioritise your spending
One day you and your friends are spending the same amount of seemingly endless cash on fun things, then suddenly your Facebook feed is full of pictures of them with babies and keys to their own home. We’ve all been there.
The urge to follow suit is strong, but take a moment to think about what YOU want to do.
Prioritise your spending based on your own values and don’t be influenced by what those around you think is right. Everyone has different ambitions and if yours is to own a pool full of Doritos, buying a house will only hinder you.
2. Get rid of bad debt
A credit card can be a useful tool when used correctly, but it can also be a tremendous burden.
In the heady, carefree days of your early twenties, throwing a few big ticket items onto the old CC probably won’t ruin you (see lesson five), but if you don’t reign in your spending that debt can quickly become unmanageable.
If you absolutely cannot help yourself and find yourself swimming in a pile of debt rather than Doritos, then don’t just let it sit there incurring interest.
One approach is to apply for a loan to pay off the balance of your card and then throw it into the ocean, or just cut it up if you’re boring. The loan will give you structured repayments and ridding yourself of the card will stop any further impulse purchases.
Alternatively, a balance transfer deal can cut down your interest payments and help you pay off the balance faster.
3. Be prepared for unexpected expenses
It’s a good idea to have a thousand dollars or so stashed away for those unexpected circumstances.
This is called an emergency fund, and is perfect for things like surprise bills, medical expenses or that speeding fine you got when you were rushing home to watch the latest episode of The Bachelorette.
Having this safeguard will ensure that you won’t have to live on two minute noodles when the unforseen comes to slap you across your face-wallet.
4. Make a budget and stick to it
Take some time out from your Bachelorette re-run marathon to sit down and plan your spending. At the very least put it on mute.
Allocate your weekly income to cover the things you need, and then consider your priorities.
I know you really want to dive into that corn chip pool as soon as possible, but you’re more likely to stick to your budget if you make it realistic.
That means not cheaping yourself out of essentials or things that make you happy.
Allocate an entertainment budget and don’t be afraid to spend a little extra on the nicer toilet paper. You can have short term happiness and achieve long-term goals.
5. Learn from your mistakes
So maybe your nacho pool wasn’t such a great financial investment, kudos for admitting your fault. The obvious advice here is that you probably don’t want to buy another snack themed hole.
But more seriously, it is ok to make mistakes with money; even the wisest investor is susceptible to poor choices. The most important thing is that you learn from your experiences and make better decisions in the future.
Just ask anyone over the age of thirty.
If you don’t want to learn from your own mistakes, why not learn from someone else’s? Check out Investing Lessons I Learnt the Hard Way for four things The Hip Pocket’s Alex Brophy wishes someone told him before he started buying and selling shares.