5 Essential Financial Hacks for Young Professionals

  1. Home
  2. /
  3. Financial Advice
  4. /
  5. 5 Essential Financial Hacks for Young Professionals

A friend of mine was venting to me recently about her money problems, which in a nutshell went like this: “I’ve been working for a decade now and make good money, but I don’t seem to have anything to show for it. Although I’m earning a lot more now than I ever have I don’t know where all the money goes…”.

If this sounds like you there are some simple things that you can do to take charge of your money, but remember just because they are simple, doesn’t mean they are easy!

To improve your relationship with money, you need to shore up your defense and then get on the offense.

Here are the 5 Essential Financial Hacks for Young Professionals that transform money management from being a gruelling, dreadful task to becoming something you really enjoy!

Set a Goal & Make a Plan

Think big, start small, and act now. Decide what you want in life and what you need financially to do that – this could be anything from achieving total financial independence, to ticking off all the items on your bucket list, to paying your parents back the hundred bucks that you borrowed. Remember, money is a means to an end, not an end in itself. If you are struggling with debt, add up what you owe, set a timeframe to pay it off, and work out how much you need to pay off each pay to make it happen.

Pay yourself first

Although it is great to pay down debt, paying yourself is the first thing to do. As humans, we tend to spend first, save next and invest last. The problem with this is that there’s usually very little left to save let alone invest! The way to fix this is to change the equation – save first, invest next and spend last. Ideally, we want to allocate 20% of our pay to savings and investing (this is how you get enough money to do the stuff above) however start with whatever you can. This has a threefold effect – you build up an emergency buffer, you will start allocating money to be able to take advantage of future investments when they arise, and you’ll change your mindset to being in charge of your money.

Invest in yourself

I like to refer to the above as ‘playing defense’ and getting the foundations in place, now it’s time to get on the front foot. Investing in yourself involves increasing your skills to increase your earning potential – courses, classes, books, etc., that are related to your work or something that you can do on the side. Learn about investing and money so you understand the basics and get advice; a coach or a mentor if that’s going to fast track your success. Allocate money each pay into a separate account for this, even if it is a small amount – I started with 2% of my net pay when I graduated which was enough for a new book each week. This will most likely be the best investment that you will make.

Automate

Once you have done the above, automate everything. Set the % that comes from your pay to go to your savings account, investment account (this could be your super fund) and ‘personal growth’ account. Have the amount that you need to pay down any debts automated from your bank as well – this can all be set up to be done the day after you get paid. Have an account for food & bills, including rent if you are renting, where a set amount goes each pay to cover all of your bills. From here you can spend the rest of your pay knowing that you have your finances on cruise control.

Reward yourself

It took me a while to learn this but we can go a lot longer when we reward ourselves along the way, not just at the end. Small incentives work – set small targets along the way to your big goal and reward yourself along the way (no credit cards or After Pay though!).

These are simple steps for a reason. To become great at something it’s better to do 5 things 1,000 times rather than 1,000 things, 5 times. The same is true with your money – get good at the basics and you will feel in control of your money and soon enough, will be ticking off all those items on your bucket list.

If you would like to learn more about managing your finances and smarter methods for growing your wealth, we’re currently offering a FREE Discovery Call with one of our friendly Financial Planners. In this chat we can put together a tailored action plan that you can start implementing right away.

To receive a Complimentary 15-minute Discovery Call, follow the link below to pick a time that works for you, and get ready to take control of your finances today.

Financial Hacks for Young Professionals
Disclaimer

Neither Finnacle Solutions Pty Ltd, Finnacle Finance Pty Ltd or Finnacle Pty Ltd (Finnacle) nor its directors, employees or authorised representatives make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information. To the extent permissible by law, Finnacle and its directors, employees and authorised representatives disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise).

Any performance figures quoted in the website or articles are past performance. Past performance is not an indicator of future performance. Neither Finnacle nor its directors, employees or authorised representatives guarantee or make any representation as to the performance of the financial products, the maintenance or repayment of capital, the price at which financial products may trade or any particular rate of return.

Some information for the graphs, charts and illustrations contained in these web pages has been sourced from third parties and Finnacle does not make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information. The information in these web pages is only intended for Australian residents.

Share This

Menu