Money in Your Twenties: Here’s What You Should Be Doing Now


Being a woman in 2018 means doing your own “money stuff”.

It means filing your own tax returns. Setting up your own bank accounts. Deciding how much to save and how much to spend (on unnecessary! impractical! pointless! junk!!).

But how do we know if we’re doing it right? How do we know if our financial plan is any good? What if we don’t even have a financial plan?

Ella Dromgool is a financial consultant, a mortgage and insurance broker, and a homeowner. She’s passionate about helping young men and women “get financially ahead.” After obtaining a degree in Accounting & Commercial Law, she began working as an accountant at one of the country’s top firms and after lots of smart saving was in a position to buy her first home at only 21 years old. 18 months later she purchased her second property…

Once you’ve picked your jaw off the floor, scroll down to read her response to some of your most pressing money questions.

What is a “financial plan”, and should we have one? Do you have one?

The short answer to both of those questions is YES!

We should all set financial goals, alongside our spiritual, family, career, social and health goals. It’s important to understand how much you are earning, how many hours it takes you to earn that money, and then how quickly it is going out – your spending.

If you’ve never had a financial plan before I would start by using a net worth calculator, link found here. This will give you a nice breakdown of what you OWN (your assets) and what you OWE (your liabilities). After you’ve done this you will be able to identify what is causing you the most financial anxiety: is it your overdraft that hasn’t been paid off since your tertiary account closed two years ago? Is it your credit card that doesn’t get paid in full each month?

From here you can create a “Smart Goal” to either get rid of debt or increase your assets. Here are some examples of Smart Goals:

“By December 13, 2018, I want to have repaid my student overdraft of $1,500. To do this, each week I will pay off $125 when I get paid.”

“By March 2019, my partner and I want to have a $36,000 deposit for a house. To do this, we must have $36,000 in our savings account which is $3,000 per month, so $1,500 each.”

“I will save $8,000 in the next six months to travel to Bali and take part in a yoga course because #wellness. I will do this by saving $1,333 per month.”

Alternatively, you could start with a “31 Day Money Challenge”. These are quick and fun ways to get rid of bad money habits and start implementing smarter ones. Read my article here, print off the template and stick it to your desk at work. Do it with a friend and hold each other accountable.

How can we save for the future while still enjoying the selfishness of our twenties? 

First, change your mindset: remember that you are saving now to give a gift to your future self. Then, establish your priorities. If you are a fashion lover, it might be too much to try and give up shopping entirely, so instead set yourself a budget and make cuts elsewhere like foregoing a gym membership and instead exercising outdoors with running or walking.

Use the Spending Planner Template to discover exactly where your money is going and then allow yourself some “spending” money. Take your spending money out of your account in the form of cash so that it’s tangible – compared to a credit card which is highly convenient and hard to pay off. Once you’ve spent your cash it’s time to knuckle down for the rest of the week and stick to free activities.

How many bank accounts should we have, and how much should we be putting into our savings account each week/month? 

You should save a minimum 10% of every pay cheque you receive. And I mean minimum. Jump onto the bank app on your phone right now and see if you’ve got 10% of your most recent pay cheque sitting in your account, if you do you’ve nailed it! If not, you are simply spending too much.

How do you secure your 10% minimum? Set up an automatic payment into an account that you can’t access online and link it with your payday. Do. Not. Touch. It. Seriously, don’t touch it. It will take time to build it into something substantial but the best way to eat an elephant is one teaspoon at a time.

A simple way to set up your bank accounts is to have three:

Account One (Everyday Spending Account): This account should have a cash balance that reflects your weekly spending allowance (net pay minus savings percentage per week minus non-negotiable bills like petrol).

Account Two (Emergency Account): This account has a constant balance of a comfortable amount. Everyone’s is different but I like to have a balance of $2000 for things that pop up unexpectedly like flights or car problems. It’s not for an unexpected ball dress.

Account Three (Serious Saver Account): This type of account earns interest if you don’t withdraw for the month. This is your future fund, whether that means a house or travel or a family. It’s the one you don’t touch.

How can we avoid “money guilt” and stop comparing our financial situation to that of our friends?

Money is an intimidating and awkward topic but education around money is a crucial life hack that should be taught to all of us from a young age. In reality, a lot of our parents were from the baby-boomers generation that were never taught about money from their parents and therefore it wasn’t ingrained in them to pass their knowledge down to us.

Many of us presume that the more money you earn, the easier it is to get ahead, but income levels and financial progress do not go hand in hand. The best advice I can give you is to be open about your money goals with your girlfriends, hold each other accountable and opt for activities that won’t burn a hole in your back pocket.

Header image by Holly Burgess for The Twenties Club