How to be rich in your twenties


It's completely possible to be rich in your twenties, which will set your life up financially for your thirties and beyond. Find out how to be rich in your twenties, with the 12 things to do in your 20s to be rich in your 30s.


While it’s not the case for everyone, so many people in their twenties, and even many thirty-somethings are living pay to pay.  But it doesn’t have to be that way.  I’m only 8 months off turning 30, and while I definitely don’t have all the answers and I’m not yet where I want to be financially, I have learnt so much over the past 10 years, and I’m in a much better position because of it.


My ultimate goal is to be financially secure, and be in a position where I have enough income earn’t from investments that the bills can be paid no matter what the future holds.  I have seen people struggle with money issues and it’s not a position I want to find myself in.


While your twenties are all about enjoying life while you are young, a few little smart moves here and there could make a massive difference to your future, and set yourself on the road to financial freedom.  Here’s how to be rich in your twenties.


1. Pretend you earn less than you do

Getting into the habit of spending every single cent you earn will set you up for a lifetime of never having anything left at the end of each pay period.  Pretending you earn less than you actually do is a great financial habit to get into.  Basically, you want to trick yourself into thinking you are poor.


The easiest way to do this is to set up an automatic deduction from your transaction account as soon as you are paid.  You will then only see the remainder in your transaction account , making it easy to pretend you have less disposable income than you really do have.


2. Live below your means

Living below your means is the number one rule to live by if you want to get in front.  For example, if your income is $60,000 per year, don’t spend as though you are earning $80,000 each year.  Chances are that $20,000 difference between what you earn and what you spend is going to become a credit card debt, and that level of debt year on year is going to be hard to claw your way back from.


If you are really struggling to live a lifestyle that suits your income, it’s time to find a way to increase your income, whether it be setting your sights on a higher paid job, finding a second job or finding a way to make a side income from home.


3. Start thinking about retirement

Retirement is generally something far from your thoughts in your twenties, but it’s worth putting a little thought into the difference planning for your retirement now could actually make on your retirement.  Adding a little extra to your super now on top of your employer contributions could make a massive difference to your super balance once retirement does arrive.


Be sure to check for any government or employer bonuses your could receive when you make extra contributions to your super fund.

4. Invest your savings

Investing can be extremely daunting, and the way you invest your money will depend on how much you have to invest, and the level of risk you are comfortable with.  With the interest currently earned on savings accounts here in Australia, you could up the income your earn from your savings by looking into different investment products.


Your local library is sure to have a great range of books on investing.


5. Discover your library

Libraries these days are awesome, they are nothing like the stuffy and boring libraries of the past.  Most libraries have an amazing range of new release books, CDs and DVDs.  I’m a huge fan of cooking, so I use my library to borrow the latest cookbooks, saving me hundreds if not thousands of dollars each year.


Libraries also make for a great free outing with the kids.  Be sure to also check out your libraries craft and story time activities, all of which are generally free and ran on a weekly basis.


6. Don’t be brand loyal

Being brand loyal for some things is great.  Like if your find a product that just works and no other brands compare, then it’s worth sticking to that brand.  But for other items that don’t matter quite so much, never be brand loyal.  When I do my grocery shopping, most of the brands I buy are determined by which item is on sale that week.


If you do prefer a particular brand, try to always stock up on the brand when it’s on sale, even better if it’s regularly a half price special, as many big brands often are in the major supermarkets.


7. Don’t buy things just because they are on sale

I’m someone who gets a real thrill from finding an amazing bargain, so this is a habit I have struggled to break over the years, but it’s a battle I feel like I’m winning.  It’s easy to convince yourself that you need something just because it’s on sale, but if you didn’t need it in the first place it’s not a bargain.


I feel like I have wasted some much money over the years buying things like clothes that were a fraction of their original price, just for them to sit in my wardrobe unworn.  Making the decision to only keep items I love and actually use means I no longer feel the need to clutter my house with items I know won’t ever be used, saving me bucketloads of money.


8. Have a minimal wardrobe

Following on from number 7, creating a minimal closet will save you so much money buying items that will be out of fashion in no time.  Rather than having a wardrobe jam packed with items that barely if at all get worn, have a big declutter session and only keep the clothes that you actually wear.


Some people decide to only keep a certain number of hangers in their wardrobe, which restricts the number of clothes they own.  You are then forced to get rid of an item of clothing when you bring home a new items of clothing.  This makes you think twice before buying new clothes, which save massive amounts of money in the long run.


9. Pay off your debt

Whether it’s a student loan or credit card debt, paying off your debt as soon as you possibly can will do amazing things for your future.  Try prioritising your debt from highest to lowest interest rate, which means that here in Australia your HECS debt will be the last debt you pay off, given that the debt only increases with current inflation rate.


Once your debt is gone, you can focus on saving and building your investments to create a wealthy future.


10. DIY your beauty treatments

Paying to have your hair, nails and other beauty treatments done on a regular basis can add up to a small fortune each month.  You can free up so much cash by doing some of these things yourself.


Choosing a low maintenance hairstyle might mean that you need trims less often, and you don’t need to spend huge amounts on hair products.  You could also DIY some of your own beauty products, like making your own body scrubs and dry shampoo.


11. Say goodbye to impulse buys

It’s so easy to impulse shop these days, with shopping centres in every suburb and the huge number of online stores.  With a few clicks you can buy just about anything online.


The best way to avoid impulse shopping is remove yourself from temptation and give yourself time to think before you make a purchase.  That means unsubscribing from those tempting online store sale emails, and giving yourself 24 hours to think before you actually make a purchase.  Most of the time once you are away from the buzz of the shops you will realise you didn’t really want it anyway.


12. Make the most of your 20’s financially

While it’s easy to convince yourself to forget about money and just enjoy life in your twenties, the fact is that your twenties are the best time to build wealth.  I’m not saying you should give up everything in order to save every dollar you earn, but making a few sacrifices here and there will make all the difference when retirement looms, thanks to the amount of time your money has to let compounding work it’s magic.


Going without a little now means you will have a whole lot more in the future.  Don’t wait until your thirties to focus on your money, start now!


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