Developing positive habits with money from an early age provides you with the tools you need as you grow older and make more substantial purchases - like buying your first home.

So, it’s a good idea to begin this journey from a young age. Learning how to save money is a skill, so in this post we look at some of the things you can do to manage your finances in your 20’s and beyond.

Know Your Net Income

The first step in managing your finances is to identify the amount of money you have coming in from work, government payments or other allowances. You will need to subtract your deductions to understand your net income. Without fully understanding how much you earn versus how much you spend, you can end up over estimating what you can and can’t afford. It can help to create a budget based on how frequently you are paid. I.e. weekly, fortnightly or monthly.

Watch Your Spending

A great money saving tip is understanding the difference between wants and needs. A good rule of thumb is to avoid impulse buying, take time to do your research and make sure your purchase is a need not a want. Once the income starts rolling in from full time or regular work, it can be easy to assume you can afford larger, more expensive purchases.

There are many apps available that help you to budget and track your spending and receipts. You can also use our personal budget calculator as an estimate of what surplus of money you could be left with after regular expenses are deducted from your income.

Build a Credit Report

You may have heard of the term ‘credit score’, or credit report’. Managing finances includes paying bills and making loan repayments on time. These actions are noted on your credit report, which is what lenders will look at as part of a loan application. Learn more about building credit reports. A great way to stay organised to pay bills and loans on time is to set a reminder in a calendar so you don’t forget when things are due.

To show a lender that you can effectively manage your money, you could consider getting a low rate credit card to begin building your credit report. Taking out a phone plan or utility account in your name will also start a credit report.

Have a Savings Plan

It’s important to allocate parts of your income into savings accounts to save for major purchases like a new car, holiday, furniture or even a house deposit. Allocating a goal for your savings will encourage you to save. It is tempting to spend money that hasn’t already been allocated for a goal or other major purchase.

Making a budget will help you create a savings plan, as you will know how much money you have left over after your expenses. Put a portion of this into a savings account, which can be opened online. Horizon Bank does not charge account keeping fees, which means more money in your pocket.

Review Your Personal Finances on a Regular Basis

Circumstances change so it’s important to review your personal budget and goals on a regular basis. If you receive a pay rise, it is a good idea to consider putting more money away into your savings to help reach your goal faster. However if you see a reduction in income, you may need to revisit your budget and look at cutting back on expenses where possible. Managing finances effectively requires foresight, so talk to your bank and other creditors about repayment options if you find yourself struggling to make payments on loans and accounts.

At Horizon bank, we can help you manage your finances in your 20’s. Get in touch with us today to learn more about our products and services and how to make the most out of your money.

Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.


The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.