With adulting comes personal finance, but it’s not always easy to stay on top of it in your 20s, especially when you’re just starting out and probably don’t make much money. But if you can get yourself into the right habits now, you can set yourself up for financial success down the road. Here are five tips that will help keep you on track, even as a young adult in your 20s. If you are a business owner, you will likely make use of accountants in north wales.

1) Create a Budget

Many young people get overwhelmed at the thought of creating a budget, but it’s necessary if you want to save money. First, figure out how much you earn each month and categorize your expenses into fixed and variable costs. Fixed costs are those that don’t change with your income, like rent or student loans. Variable costs vary depending on what you spend them on—groceries, clothes or going out with friends. Once you’ve estimated all your monthly expenses, subtract them from your monthly income. The remainder is what can be saved or spent without exceeding your budget.

2) Create Short-Term Goals

In your 20s, it’s easier than ever to get caught up with day-to-day living. Before you know it, your life can become a bit of a blur. If you don’t have some sort of long-term plan in place, your future will be no different. Instead of letting time slip away from you, create a goal for what you want to achieve by age 30 (or 35). For example, maybe you want £10,000 in investments by that time or maybe you want to own two rental properties by then. These goals give direction and purpose to everyday activities that are easily forgotten.

3) Set Up Automatic Deposits

When you’re an entry-level worker, you don’t always have access to a lot of cash. Some employers offer direct deposit as a way for their employees to avoid checks and make sure they get paid on time—and that’s never a bad thing. Use your paycheck without having to worry about running out of money and set up automatic deposits each month so there aren’t any overdraft fees when it comes time for rent or bills. The less attention you need to pay your money, the better off you are—not just because less attention means more free time, but also because it leaves room for error when dealing with your finances.

4) Get Out of Debt

Making extra payments toward your loans and cards can be a great way to knock out debt quickly. Ask your lender about making additional payments (called prepayments) and put that money toward higher-interest credit card debts first. If you have high-interest loans, ask if they offer a loan-reimbursement plan; it will get you out of debt faster and save you money in interest over time. The key is to never make less than minimum payments—otherwise, the interest could erode away much of what you’ve paid off, leaving you with more debt than before.

5) Monitor your finances carefully

Set up budgets, track your spending and make sure you’re staying within reasonable limits. If you see that you’re spending more than you make each month, it’s time to figure out how to balance your budget—and fast. Learn how to curb your expenses so you can live comfortably without getting yourself into debt. Make sure every penny counts!

Conclusion

There’s no one-size-fits-all solution when it comes to managing your money, but as a general rule of thumb, you want to keep things simple. Make sure your finances are organized and that you’re maximizing every opportunity for growth. Most importantly, don’t spend more than you have; it might be tempting to live it up at 22 but sticking to a budget will pay off later. When it comes time for you to take out a mortgage or buy a car, you won’t have mountains of debt. It may seem boring now, but preparing yourself with great financial habits now will pay off later, especially when it comes time to start your own good business.