In case you’ve been blissfully living under a rock for the last couple of weeks, we are now *officially* in a recession, and if you’re like me, you’re probably freaking out about it to be honest.
Trying to navigate your finances in your 20s is already difficult enough, but when you chuck in a global pandemic and a recession, it definitely feels easier to just bury your head in the sand and live in a world of blissful ignorance. But we all know that’s *probably* not the smartest option, so I asked creator and host of the hit podcast My Millennial Money Glen James how the heck I can make it through my 20s without totally fucking up my future.
In addition to hosting the wildly successful podcast, Glen James is a certified financial adviser, so he’s actually qualified to tell me wtf I need to do to stop being a Big Dumb Idiot™ with my money.
If you want to sort out your finances but the idea of reading the Australian Financial Review quite literally makes you want to gauge your eyeballs out, this one’s for you.
Glen’s #1 Piece Of Advice Even If You Ignore Everything Else:
As a 22-year-old with an addiction to UberEats and a subscription to just about every streaming service known to man, I’m not about to completely change my lifestyle for the sake of saving money. So obviously, I had to start by asking for the single best piece of money advice he could give me.
“Build a money system that works – make sure you spend less than what you earn. Create a system where you give, save and then spend. Also start thinking about how you are investing for the you of tomorrow, today,” Glen told PEDESTRIAN.TV.
So basically, if you do absolutely nothing else, Glen reckons you should sort out a budget. There’s about a million different options out there, and it really doesn’t matter which one you choose, provided it works for you and you’re spending less than you earn.
Cool. That sounds simple enough.
But, on account of the fact that I am on a ~journey~ to being less shit with money and have access to people who are far more financially literate than I am, I thought I’d pick his brain on a few more tips to sort my life out.
So without further ado, here’s Glen James’ checklist of stuff you should do right now if you’re not very financially savvy.
1. Save An Emergency Fund
If 2020 has taught me anything, it’s that things can get very dire very quickly, so it’s probably good to have a bit of cash sitting in an account in case you lose your job, need to take extended leave or have an unexpected bill.
“Try to always have a cash back up in case something doesn’t go to plan,” Glen advises.
2. Be Clear About What You’re Doing In Life
Having a clear plan of where you want to be or what goals you wish to achieve (e.g. buying a house) makes it easier to work out how much you need to save.
“This sets the direction for how your money is spent (or not),” Glen said.
3. Keep Your Cashflow Flexible And Agile So You Can Adapt
Making sure you’re not too tied up in bills and repayments that are locked in long term makes it easier to adjust your life as needed. Glen recommends trying to “keep your expenses lean so you aren’t tied up and can change direction at any time.”
4. Stay Out Of Consumer Debt
Glen recommends keeping out of debt wherever possible, especially when it comes to credit cards and financing cars. Obviously, credit cards can have benefits depending on your situation, but if you’re going to get one, you should make sure to pay it off in full every month to avoid paying interest.
“Don’t sign up for ongoing repayments with credit cards or financed cars! Use cash if you can.”
5. Watch Out For Lifestyle Inflation
Perhaps the hardest tip to follow is making sure you don’t fall victim to lifestyle inflation. To put it simply, Glen says “just because you get paid more, doesn’t mean you should spend more. Start investing anything extra for the future!”
Obviously, all financial experts will have different tips and tricks for navigating your finances in your 20s, but if you’ve got no idea where to start, trying Glen’s tips could be helpful for you.
All advice is general in nature, consult a financial advisor for personalised advice for your circumstances.