How to start saving money in your 20s

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on April 02, 2019
How to start saving money in your 20s

Photo by Priscilla Du Preez on Unsplash

Here’s a twenty-something finance journalist’s guide to saving money in your twenties.

When you’re in your twenties, saving money can almost seem impossible. How are you supposed to pay your rent, bills, buy groceries, stay on top of student loans, maintain a busy social life, buy a new outfit for that engagement party, and save money?

Fear not budget newbies. The tips below are so doable, you can have your soy latte and avocado toast – and eat it too.

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory interest rates on the market.

1. Make a budget – and actually stick to it

Really, the best way to save money is to keep track of where it’s going in the first place. After all, how can you decide where to make cuts on spending if you don’t know where your money is being spent?

You want to make a list of all your monthly expenses, like rent, bills, groceries, and any subscriptions and debt payments you have. Once you have a clear idea of how much you’re spending in a typical month, you can identify any problem areas you may have. For example, you may have a habit of wracking up too much Afterpay debt or spending too much money on Ubers (like this gal).

Keeping a written budget and tracking your expenses is half the budget battle. Here are some of the best budgeting and saving apps that will keep you on track to meet your savings goals. 

2. Bring your own lunch to work

Packing your own lunch can save you a ton of money, and you’re way more inclined to make healthier choices when you prepare it yourself.  

Cook extras for dinner and take the leftovers to work the next day.

3. Catch public transport

Make it your goal to catch more buses than Ubers. By the end of the week, that daily $20 trip amounts to the average weekly grocery shop for a single person.

4. Avoid delivery apps and takeout 

Uber Eats is great for those nights when you just can’t be bothered cooking, but unfortunately it quickly adds up. Save on the delivery costs and cook your own meals at home. You don’t have to be a whiz in the kitchen either to make a decent meal. There are plenty of simple recipes out there that are easy on the wallet – bonus points if you take the leftovers to work the next day.

If you really can’t go without Uber Eats (no judgement!) try and limit it to just one night a week instead. 

5. Make your own coffee

And I don’t mean instant coffee, because no matter how serious I am about saving money, I’d really have to be desperate to drink that.

If your workplace comes with a coffee machine, use it. The average cost per cup is between $0.40 and $0.60 compared with $3.50 – $4.00 for a cafe brewed cup, so there are big savings to be had by brewing your own cuppa.

6. Use reusable coffee cups

If you really must buy your coffee every day, at the very least opt for a reusable coffee cup.

Not only will you be doing a big favour for the environment, most cafes offer a discount if you bring your own.

7. Cancel memberships or subscriptions you don’t use

How many times have you been surprised with a bill for a membership or subscription you completely forgot you had?

Personally, way too many times to count. 

Chances are you probably don’t need a Netflix, Stan AND a Foxtel Now subscription, unless you really are watching a lot of TV on all three streaming services. 

8. Spend less than you earn

This one sounds pretty obvious, but it’s easy to get carried away with your spending sometimes – especially when sweet payday hits and the temptation to go out and buy EVERYTHING is real.

But living from paycheck to paycheck is risky business. You can almost be sure that your car will break down or you’ll get hit with a massive unexpected medical bill. It’s almost like you’re tempting fate.

Your twenties are the best time to get into the habit of putting some money aside from every paycheck, rather than blowing it all in one go. When you (inevitably) need to make a big purchase like a house or car, your future self will thank you. 

9. Share meals

My housemate and I have one night a week where we cook and share a meal together. Not only does it give us a chance to catch up, it saves us a little bit of money too. 

Alternatively, if you’re eating out, order entrees or side dishes to share with friends, or split a large meal and save on costs (and food wastage!). 

10. Don’t be afraid to doggy bag leftovers

While we’re on the subject of restaurant food wastage, don’t be afraid to ask for a takeaway container for your leftovers if you can’t finish your meal. 

11. Take five before you impulse buy

It’s definitely easier said than done, but before you drop a cool $350 on that dress from Zara, ask yourself if you’re actually going to wear it – or if it’s just going to collect dust at the back of your wardrobe (ahem, guilty). 

If you’re a constant impulse offender, work out how many hours of work it would take to earn the purchase price of the unnecessary item you’re considering. That $1,500 bag suddenly doesn’t look so appealing – it’s an easy way to sort the ‘nice-to-haves’ from the real needs.

12. Switch off your lights and air conditioning when you’re not using them

Leaving a light on may not seem like a big deal, but all those little expenses can add up to a whopping electricity bill at the end of the month. 

Get into the habit of hitting the lights every time you leave a room in your house or apartment.

13. Plan your weekly meals in advance and stick to a shopping list

It can be time-consuming but it pays (literally) to plan out your meals for the week in advance and make a shopping list (that you stick to!). That way, you’ll be a lot less likely to buy a whole bunch of things you don’t really need.

Check your pantry, make a list, and buy stuff that’s either on sale or brand named. Don’t buy things you don’t need and will only chuck out once it goes mouldy and funky in your fridge.

Here are some of the best apps for saving money on groceries.

14. Suggest Secret Santa at Christmas

Christmas can be such a financial drain – especially if you’re buying presents for everyone you know.

Instead of buying every family member and friend an individual Christmas gift, suggest doing a Secret Santa instead. That way, you only need to buy a gift for one person, saving you money (and time) which is great if you’re a bit lazy like me. Win win!

15. Socialise on a budget

Being on a budget doesn’t mean your social life has to suffer.

Opt for drinks during happy hour, go to BYO restaurants, suggest free activities like picnics, or entertain for free at home. 

16. Use discount codes and coupons

There are tons of discount and coupon sites online which will normally have deals in your area.

If you can’t be bothered to trawl the internet for deals yourself, there’s a handy Chrome extension called Honey that automatically finds and applies coupon codes at the checkout.

17. Review your health insurance

If you’re in your twenties, you probably don’t need to be covered for things like hip and knee replacements. If you’re not thinking about starting a family anytime soon, you probably don’t need to be covered for obstetrics either. 

Review your health insurance and make sure you’re only paying for what you actually need. 

18. Buy used goods

Second-hand doesn’t need to mean lower quality either – sometimes second-hand goods can be the same quality as buying brand new. If you’re a university student, don’t make the rookie error of buying all your textbooks brand new like I did at uni. 

Look at your institution’s second-hand bookshop or the Facebook group to find the textbooks you need. Once you’re done with them, you can resell them and make your money back.

19. Buy good quality appliances

You might be saving money in the short term by buying a cheap dryer, but the more expensive version will wind up saving you energy and will last 15 years instead of five – saving you significant money in the long run. 

Sometimes it pays (again, quite literally) to buy the more expensive option rather than just going for whatever’s cheapest. With things like appliances, you get what you pay for.

The same goes with clothes. Sure, that five pack of t-shirts may only cost $20 but they’ll probably only last a few washes before stretching out of shape, so it’s worth investing in pieces that will last longer.

20. Buy a reusable water bottle and actually use it

Do your wallet (and the environment) a favour and get yourself a good quality reusable water bottle. The cost of all those single-use plastic water bottles quickly adds up.

21. Take reusable shopping bags to the supermarket

Save on buying plastic bags and chuck your reusable ones in the car, keep spares at work or one in your handbag for that impromptu shop. Just don’t forget to take them out of the boot when you go shopping.

22. Do a stock take of your wardrobe and sell your unwanted clothes

Clothes can be a HUGE money suck – I know I’m routinely guilty of dropping hundreds of dollars in one hit on a bunch of clothes that never end up seeing the light of day.

The result of that is a wardrobe bursting at the seams with things I know I’ll never wear, but feel too guilty to chuck out. If you’re in the same boat, do a stock take of your wardrobe and sell anything you don’t want online. 

23. Buy the generic version of medicine

The next time you need to fill a prescription at the chemist, opt for the generic version instead. It’s exactly the same chemically, but usually cheaper than the brand name equivalent. 

24. Reduce your vices

Whether it’s drinking, smoking, or your addiction to coffee, make a conscious effort to cut back. Healthy and wealthy!

25. Consider staying at home longer

Living with your parents well into your twenties may not be the most appealing idea ever, but you stand to save a heap of money on rent, bills and groceries if you do.

26. Really think about what rent you can afford

Sure, that fancy $450 a week apartment in that trendy inner-city suburb might be hard to resist but you should ask yourself whether or not you can actually afford it – or if you can put up with somewhere cheaper for now. 

27. Make your own cleaning products 

Most of the time you can get away with mixing your own cleaning products at home with just a few simple ingredients you probably already have, like baking soda, lemon juice, vinegar, and table salt.

Plus, you’ve got the added bonus of not breathing in any of those harsh chemicals store-bought cleaning products have.

28. Share a Netflix/Stan account

If you live in a share house or with your partner, it probably doesn’t make sense for you all to have separate Netflix accounts when you all share a TV.

Just don’t be THAT person who mucks up someone else’s TV viewing history and have separate user accounts.

29. Take advantage of workplace perks

Make use of any free office benefits be it free breakfasts, fresh fruit, tea and coffee, or discounted gym memberships. 

30. Pay with cash

It’s time to get old school. When you can physically see the amount you’re spending, you’re a lot less likely to overspend or make impulse purchases. Physically parting with $200 feels way more painful than mindlessly tapping your card.

31. Buy your home staples in bulk

Purchasing home staples like toilet paper, laundry detergent, paper towels, cooking oil, dishwashing tablets – aka all those things we hate carrying home from the supermarket – in bulk will always pay off in the long run. 

Also because finding out you’ve run out of toilet paper when it’s too late is never fun. 

32. Swap clothes

If you have a friend who’s the same size, you could arrange to swap some of your favourite outfits so you have something new to wear – without having spent a dime.

33. Have some drinks at home before going out

Yep – pre-drinking has its benefits. Enjoying a few bevvies at home ensures you won’t fall victim to one too many overpriced drinks at the bar. 

34. Stick to one shop a week

Some people will disagree with this one, but limiting your grocery shop to once a week rather than doing several small shops will reduce impulse buys, takeaway and wastage. 

35. Exercise on the cheap

If you haven’t got the budget for a gym membership or just want to nix that monthly cost, hit the pavement, get on your bike or use that free equipment in the park.

36. Compare car insurance before renewing your policy

Don’t just renew your car insurance without comparing all your other options first. Take the time to shop around and get quotes from a number of different providers to find the highest value coverage for your budget. 

Your insurance policy may have been great value for money when you took it out, but premiums and personal circumstances change and there could be something better out there for you. 

37. Get your hair cut by a trainee hairdresser

I’ll be honest, I don’t think I could ever bring myself to do this one. There are a few things I’m willing to splash my cash on, and a high end hair salon is one of those.

But if you’re less precious about your hair and your budget doesn’t stretch to exorbitant salon prices, it might be an option worth considering. The appointments are supervised by an experienced professional who can take over if you’re not happy. 

You stand to save a lot of cash by getting a trainee to cut your hair – in some cases it can even be free.

38. Choose a savings account with a high interest rate

Savings accounts are specifically designed to help you grow your savings faster, because they offer a higher interest rate than your basic transaction accounts. The higher the interest rate, the more interest you stand to earn on your money. 

High-interest savings accounts can also be a great motivator to save, since the more money you have in your account, the more you could earn in interest each month!  

39. Delete credit card numbers from online accounts

If you’re an online shopping fiend, consider deleting your card information from all your online shopping accounts.

That way, when you’re tempted to spend you’ll have to dig your card out of your wallet.

Sometimes, being forced to take that extra step is all it takes to convince you that you don’t really need that item after all – unless like me, you’ve got your card details memorised down to the cvv.

40. Avoid credit cards, but if you still need one, use one that charges zero fees or low interest  

If you’re serious about saving, don’t spend money you don’t have. Stick to using a debit card.

But if you’re not ready to cut up the credit card just yet, consider using one with no annual fee and/or a low interest rate. A no annual fee credit card could save you anywhere from $30 to $700 a year when compared with credit cards that do charge an annual fee. And if you’re not someone that consistently pays off their credit card balance on time each month, switching to a credit card with a lower interest rate could save you even more.’s two cents

Your twenties are the perfect time to get into good savings habits while you’ve got all that disposable income rolling in and relatively few major expenses (like kids or a mortgage – all that fun stuff will come later!).

Being budget conscious doesn’t mean you have to go without either, it just means being smarter with where you spend your hard-earned cash. When the time inevitably comes to make a major purchase like a house, future you will thank you for being so financially savvy in your twenties.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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