Life can be tough financially as a twenty-something. You’re generally quite early on in your career so aren’t earning the best money, and you’re living independently for the first time. You’re learning how to navigate saving while paying bills and are coming up against various situations for the first time in your life. Large, unexpected bills, car repairs, broken down appliances and other issues that you and you alone are responsible for sorting. There tend to be mistakes that most of us make at this age, so it’s important to get things in place with your finances and prepare for a much more stable decade in your thirties when it comes to money. Here are some ideas.

Get Out of Debt

Many of us get into debt in our twenties. This can be a mixture of naivety, not realising the impact borrowing can have as well as irresponsibility — spending money that’s offered simply because we want to. A tough situation with money might have us feeling like we need to borrow money to be able to get by. When you’re not well versed in the trouble debt can bring, it can feel like these companies are offering ‘free money’ with their loans, credit cards and store cards and it’s so easy to become overcommitted. If this has happened with you, don’t panic.

Depending on the situation, you might be able to make cutbacks, sell items or work extra shifts to pay off your debts. If things have gone too far, consider speaking to a debt management agency. They can often negotiate reduced payments and have interest rates frozen so you can regain control of your finances. Debt often spirals, when you find yourself being unable to pay one thing and you end up taking out more money elsewhere. This ‘robbing Peter to pay Paul’ situation will just lead to further and further debt. By the time you reach the end of your twenties, aim to have no ‘bad debt’. This is things like loans, credit cards, store cards and excessive car finance. That way you’re in a good position to start saving and reducing your chances of falling into the red again.

Start Saving

Once you’re out of debt, this frees up money that you can start to save. Saving is one of the most beneficial things you can do in your twenties to set you up for success later on. Not only will having a rainy day fund give you a buffer if something goes wrong and you need cash, but you can also start saving towards a house deposit. Since you need a minimum of five per cent for a deposit towards a property, in most cases you will need around ten thousand pounds (the average house price in the UK is £200,000). Saving ten thousand pounds is no easy task and will take most people many years, so start early. If you want to save this in five years for example, you would need to save around £160 a month. Work out when you want to buy, and how much you will need to save each month to do so. Treat this money as you would an outgoing bill; basically don’t dip into it or be flexible with what you’re saving if you can help it. Once you’ve saved some money you could even look into smart ways of investing it to make your cash work harder; take CFD trading, for example. This allows you to speculate on the rising or falling prices of things like forex, indices, commodities, shares and treasuries — you can learn more about CFDs online. Either way, getting some money behind you in your twenties is a good idea.

Budget Your Money

Being able to get out of debt, save money and pay for everything that needs to be paid relies on you having a good budget in place. You should know what comes in and what goes out each month, and have a budget for any luxuries you want. Spending on nights out, takeaways, coffee shop coffees, hairdressers, clothes and more are all fine — having and doing nice things is the reason you work hard! But have a budget in place to limit what you spend in each area.

Don’t waste money when it could be saved, make sure every penny is going to the right place. Budgeting apps and software make this easy, otherwise you could use old-fashioned methods like a calendar or notepad. Another thing you can do is to set up all of your bills to come out via direct debit from a separate account that’s only used for bills. Work out exactly how much you need to transfer each month, that way you’re never accidentally spending money from your account that’s been put aside for bills. When you’re running a household there will be lots of outgoings coming from your account each month, so this can make things a little easier.