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Rose Miller, grants manager, at the JN Foundation, says your 20s are the ideal time to set yourself up for a solid financial future. Mrs Miller advised that young people should not underestimate the importance of establishing good financial habits during this period.

“This is when you can build the foundation that you will be able to stand on, during your 30s, 40s, 50s and beyond,” she related.

How can you go about managing your money and establishing good financial habits in your 20s? Here are five tips you can start with, today:


Mrs Miller, who also leads the JN Foundation’s BeWi$e financial empowerment programme, informed that a budget is a plan for spending, saving and investing money to achieve one’s financial goals.

“It is the first step towards achieving financial independence. And, budgeting does not have to be complicated, simply begin with ‘the 10-10-80 formula’,” she advised.

The “10-10-80″ formula recommends that: one saves ten per cent of their income, donate ten per cent to charity or tithing, and allocate the remaining 80 per cent to all other spending categories.

“This simple formula will help you save, spend within boundaries, and allows you to be generous as well,” Mrs Miller said.


The grants manager noted that savings generally represent only one part of an individual’s assets, and unlike investments, usually comes with minimal exposure to risk and the funds are more readily accessible.

“Aspire to set aside at least ten per cent of your monthly income. Therefore, if you make $100,000 a month, put aside $10,000 in an account dedicated to saving,” she recommended.

Mrs Miller said it is important to save one’s money in an approved financial institution, as that ensures the safety of your funds; and provides a chance for your money to earn interest.

“You should also bear in mind the fees that are associated with the account you choose. You want to research whether the financial institution charges a fee for using the ATM, is there a fee for making lodgments, making withdrawals, or a limit to the number of withdrawals you can make per month,” she pointed out, noting that, “All these fees add up over time, therefore, it is something you need to bear in mind.”

The JN Foundation grants manager further said people should set short, medium and long term goals, as this will assist them to save towards achieving specific goals, and help to instill discipline to attain financial independence.

Mrs Miller sought to explain the difference between saving and investing, pointing out that investing is the real creator of wealth and learning how to invest wisely, especially in your 20s is a vital step in the journey towards financial independence.

“You can unleash the power of compound interest by starting to invest early. In fact, how much you save and invest can become more important than the size of your pay cheque,” she affirmed.

Mrs Miller suggested dividing your goals into short-term and long-term buckets, and choosing investments that will help you to achieve them.

She noted, for example that, for short-term goals, like purchasing a car, consider conservative investments, such as money market funds. And, for long-term goals such as retirement, you should consider more aggressive investments, as you have time on your side to withstand the ups and downs of the stock market, she explained.

Create a Retirement Plan

If your current employer does not provide a pension scheme, you should approach an approved financial institution and start an individual pension plan.

“You can begin with a minimum of five percent of your monthly income and over time increasing to 20 per cent of your income, which is the maximum allowable,” Mrs Miller recommended.

She noted that a retirement account should be considered a need rather than a want. “You should take this as seriously as you take any other bill, such as your rent or utilities,” she said.

Become Financially Literate

Understanding finance may seem to be intimidating; therefore, take small steps now, to become comfortable with all aspects of finance, Mrs Miller outlined. “Tune in to a weekly podcast, watch Youtube videos or read the business section of your favourite newspaper to become more informed about money management,” she advised.

Mrs Miller also recommended reading at least four books per year about finance.

Monetise your talents

Mrs Miller advised young people to use their skills or hobbies to earn extra cash. “Turn your talents into money. Financial freedom is much more achievable when we have multiple streams of income,” she pointed out.

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