Great Financial Habits for Gen Y’s

Warning – there is nothing sexy or exciting about this content.  It will simply give you great financial habits which will translate into you having more money.

Your twenties are an exciting time!  There are a lot of firsts – living away from home, relationships, travelling, parties, alcohol and what appears to be freedom.  It is a great time of your life filled with laughter, learning and personal growth.  It is also a fantastic opportunity for you to build great behaviors to improve your financial position. If you are smart, you can use your twenties to lay a strong financial foundation to build on for the rest of your life.  Below are my top five tips to help you start off on the right track.


1. Budget 

This is possibly the most important element of ensuring your financial future.  Regardless of whether you earn $50,000 or $500,000, you must understand where your money is going. What are your fixed living costs; how much do you spend on groceries, how much do you spend at the pub?  Gather all your bills, bank statements and receipts and work out how much money is coming and going.  There are some great apps and software that can help with budgeting if you need some assistance (talk to us about the Fortress Wealth Hub).

Sometimes you can’t control your income, but you CAN control your expenses.


2. Live BELOW your means

Once you have a budget, you need to live below your means.  How do you do that? Spend less than you earn. SIMPLE.  Attempt to save at least 10% of your total income every time you get paid.  If you are struggling to save this money, set up an automatic transfer to a separate bank account that is not linked to your working accounts.  If you get a pay rise, increase your savings amount by that increase (after all, your living costs remain the same regardless of the promotion).

The second part of this is not to get caught in debt traps. If you want a new car, you save your money for it. Love those shoes, or need an overseas holiday? Resist the temptation to use your credit card. It is so easy to access credit these days, but it is not a great idea unless you can afford to repay it immediately.  I see so many people paying off that holiday that they ‘needed’ five years later.  This bad debt is not tax deductible, must be repaid at generally high interest and causes the actual purchase cost to be significantly higher.

If you don’t have the money to do it now, be smart and save for it.


3. Set goals

If you want that overseas holiday and you don’t have the money now, set a goal and WRITE IT DOWN. Work out the costs – for example you need $10,000 in one year to travel Europe.  That means over 26 fortnights, you need to save $385 per pay check.  Transfer it into a separate holiday account and in one year you can pay cash!  It will be a much more satisfying holiday when you know you won’t be coming home to a huge debt.

Other financial goals could include saving a deposit for a home, starting a savings plan or an emergency fund. These will be prioritised as you get older, get married and don’t spend every weekend at the pub…


4. Invest in yourself

It is vital to invest in yourself.  Get a degree. Get a certificate.  If you can’t stand the class room, get a trade. Those who do go on to formal study at university are shown to earn in excess of $1,000,000 more than those who don’t finish year 12*.   Although getting an education can be expensive, however as you continue to learn, you are more likely to get promoted within your role (with a corresponding pay increase!)


5. Pay off your home loan

Congratulations you (i.e. the bank) own your home! Now you need to pay it off…

In place of rent, you are paying a mortgage which may or may not be a similar amount. Use the great habits that you have developed to pay off more than the minimum repayment. Do this every fortnight (not monthly) as there are 26 fortnights in a year and only 12 months. I will use an example below of a client that has a $400,000 loan with an interest rate of 5% and a typical 30 year term:

Minimum monthly repayment: $2,147 (x 12 = $25,764 per year)


Fortnightly repayment: $1,073 (x 26 = $27,898 per year)

As there are 26 fortnights in the year, you will pay an extra $2,134 per year just paying fortnightly payments.  This saves $47,293 in interest over the life of the loan and has you paying off your home nearly 3 years sooner. Not bad and you won’t miss the money…

If you stretch out our 10% extra savings / repayment rule, you would repay $1180 per fortnight which means you will save $124,778 in interest, PLUS be debt free nearly 9 years earlier.

Once you have repaid your home loan, you won’t have a monthly mortgage repayment any more. That fortnightly amount of $1,073 can now be directed to building your wealth.


If you are struggling with your cash flow or don’t know where to start, please contact us to book in a free consultation on 07 4646 4970 or at

Written by Chris Black, Director of Fortress Financial Solutions

Fortress Financial Solutions founder Chris Black is an award-winning financial planner based in Toowoomba who specialises in superannuation, investing, business succession, cash flow management, retirement planning and personal insurances (including life insurance, income protection, total permanent disability and trauma insurance).

Corporate Authorised Representative of Magnitude Group Pty Ltd ABN 54 086 266 202, AFSL 221557.


Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.

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