5 Healthy Money Habits All Twenty-Somethings Should Have
It’s like what Sophia Amoruso said in #GIRLBOSS – money looks better in the bank than on your feet. While we don’t doubt that you deserve that avocado toast and a new makeup palette after a particularly tough week at work, your future self will thank you for being prudent with your money. Here are some money management tips that we’ve gleaned from 2017’s CLEO Change Makers.
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See the full list of Change Makers here.
Looking for some seriously good life inspirations? Click here to meet the CLEO Change Makers!
The CLEO Change Makers 2017 is presented by SK-II.
1. Save first; spend later
“When your paycheck comes in, put aside a portion that you want to save first before spending,” advises Audrey Tan, co-founder of Angels of Impact and PlayMoolah. In other words, treat your savings like another bill that you need to pay.
2. Build up your savings account
Because you never know when it’ll come in useful, and it’s always good to have a safety net to fall back on. Just take it from Debra Lam, co-founder of Society Staples. “I wish I’d more savings before I started Society Staples! I’d barely worked before then, so I barely had any money in the bank. It was something I didn’t prepare for well and I think I kind of expected to draw a salary sooner than it really happened, so the first few months were really tough.”
3. If you lack the discipline, consider signing up for an endowment plan
Just like drinking enough water, exercising regularly, and eating more vegetables, sometimes we lack the discipline to do something even though we know it’d be good for us. We get it, which is why endowment plans can be so helpful. “My dad made me sign an endowment plan for kids when I was young, it was like $70 a month. So I had to work and save up, and I guess that helped in the long-term… I also now have two endowment plants just for savings,” says Samantha Dorcas Soh, co-founder of Shopback.
4. Think twice before buying something
You worked hard for that money, so it’s only natural that you should spend it with care. One way to really cut down on your spending is to prevent impulse purchases, so let the items you want sit in your shopping cart for a while before hitting checkout – literally or figuratively. “Now, before I buy something, I will really think twice. My money mantra now is to just cut back on the unnecessary stuff,” says Kelly Wong, founder of Wong Kee Wanton Noodles. So yeah, do you really need a second eyeshadow palette?
5. Follow the “five times coverage” rule
Change Maker Jasmine Chong, who is the founder of Yoga Lab, personally subscribes to this rule: “I will only purchase something if I have five times coverage. So if something costs $10, I’ll make sure I have at least $50 in my bank before I commit to that $10.” We think that’ll come in pretty useful for shopaholics who are trying to curb the habit!