10 personal finance moves you should make in your 20s

It can feel like your going to be in the care-free twenties forever. But 30, is not far round the corner and there are a few personal finance goals to work towards before you hit the big 30. 

Emergency fund fully funded
This means you should have saved approximately 6 months of expenses (not income). Contribution to this should come after debts have been paid off. An emergency fund is such an important part of your financial portfolio and is really the gateway to a more financially comfortable lifestyle even when things get a little rocky. Make creating an emergency fund one of your financial priorities until it is fully funded. 

Regular contributions to retirement plan of 10-15%
Making consistent payments towards retirement throughout life is the sure fast way to having a care free retirement pot. Aim to contribute 10-15% and look for matched contributions by your employer.

Pay off student loan debt (and any other debt) 
So you've graduation nows the time to start paying off that debt you accumulated. Try to pay it off before making big financial commitments like buying a home so to allow you to have a clean slate to work from.Plus avoid accumulating any more debt.Just avoid debt, it really is that simple. If you are budgeting properly and have a fully funded emergency fund then this should be well within your ability. Work on prioritising how you spend your money to allow you to avoid debt. Stick to debit vs credit cards to allow control of how and when you spend you money. 

Have a debt free wedding
Weddings are very expensive the average wedding costs £18,000. When preparing for a wedding be conscious of the costs and look for opportunities to be frugal. Work within you budget and don't be afraid to haggle for a better price. 

Make regular automated savings
Making saving a priority and a regular occurrence means that you won't feel it and before not too long you will have a health savings pot. Set up a standing order to make automated savings from your current account. 

Be saving/ have saved for a deposit on a house of at 10% (20%+ is preferred)
Saving to put a deposit down is a big stage. It is important to save enough. Avoid the added costs of having too small a deposit. Aim for at least 20% but the higher the better. 

Take out life insurance 
If you have a spouse or dependents it is super important to take out life insurance incase of you sudden death. As you go through your twenties it becomes increasingly important to take out a policy and they can be for very little monthly payments. 

Buy a car, second-hand.
Cars depreciate in value very quickly, therefore it is better to invest your money in a second hand car where the rate of depreciation has began to slow down as most of the money is lost when you drive it off the forecourt. And most importantly buy it with cash!!

Prepare a will
You now have assets and possibly dependents, and you need to ensure that they are provided for in the case of your death. It is important and often overlooked by those in their 20s to prepare a will. It will make things a lot easier for everyone if you die. It is also important as it can help reduce the amount of inherence tax paid. 

Learn to enjoy money within your means
This is probably the biggest move as it is more about you attitude towards money and it is an attitude you will want to take with you for the rest of you life. Learning how to budget, and determine needs vs wants are key skills for being able to do this. Money, when managed well can bring great joy. But it is not the source of all happiness, it is a healthy relationship with money that will bring the most from it. 

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If you are new to our blog, we are all about finding new ways for students and millennials to make and save money. Here are some of our favourite sites and products to help you out:

• Start a blog. Blogging is our side-hustle just over a year ago we didn't think I would bring us any income . You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
• Save money with gift cards Whether its for buying clothes, your weekly shop or dining out use Zeek to buy discounted gift cards to get more bang for your buck. 
• Use Swagbucks for your online searches. Swagbucks is a passive way to earn gift cards. Over the course of a year you could earn $500.  Swagbucks is just like using Google to do your online searches, except you get rewarded “points called SB” for the things you do through their website. Then, when you have enough Swagbucks, you can redeem them for cash, gift cards, and more. Receive $5 for signing up today.
• Try matched betting. Matched betting is a great way to may easy money online. Despite the name it is not gambling and could see you earn £500-£1000 a month for only a couple of hours work a day see here and here. For your free trial head to profit accumulator or join the Facebook 'getting started' group.  
• Sign up for a cashback site like Quidco. where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free £10 bonus!

We're Debt FREE

The big day has come and the credit card is finally paid off for good. Over the past 7 months C's paid off over £2400 (as a college student). As previously mentioned in my post about being engaged to someone with debt I personally have found this a very humbling experience. As someone has always prided herself on her financial sensibility to have to deal with debt has made me grow and become more considerate to others. Though it has been tough, especially in the beginning, C and I's relationship has grown much stronger for it and I am thankful for the challenges we have been given. 

For C the amount seems pretty overwhelming and difficult to cut down. However, once he realised that if broken down into monthly chunks of on average £350 it was much more manageable. By creating a plan with smaller term goals we were able to feel constant progress. C's credit card was 0% interest until this November (so it was essentially a free loan), so the challenge was initially to pay it off before interest kicks in. However, when we realised we could pay it off before the next academic year that was when the goal was set. Now in September 2014 (two weeks before class starts) we are able to say that the goal was met. 

Debt Kicking Changes
- We made paying the debt a priority. It is one of the first things to get paid after payday. Meaning the rest of the month revolves around how much we put towards debt. Rather than paying it at the end of the month where you can end up overspending in other areas because you forget about the payment.
- Making our own lunches. This is a simple way to save approx. £3 a day. We opt for pasta and a tomato sauce most days.
- Cutting down how often we eat out (and how much we spend eating out). Eating out is a big part of our social life and so it has been hard to cut back. Encouraging pot lucks, and having dinner at home with friends has been a great option so that we don't lose out on the social side. 
- C move job locations so that he could be contracted for more hours and pick up more overtime resulting a increase in his paycheque 
- We had a lodger in our lounge for 6 weeks. Though not intentionally a side hustle at first (rather just helping a friend out) it managed to bring in about £300.
- C sold some of his holiday (that he wasn't going to use) at work to get some extra cash raising about £200

In hindsight we probably could have had it paid of sooner. We had a holiday booked during this period before the decision was made to focus on becoming debt free. Had we not had taken would have cut the paying off time down by a few months. But as we were not battling with interest rates we were not feeling bound to be super 'gazelle intense'. However, this is very limited to our circumstances and not something I would generally advocate during a debt free process. 

Share your debt free journey with us below by commenting.

______________________________________________________

If you are new to our blog, we are all about finding new ways for students and millennials to make and save money. Here are some of our favourite sites and products to help you out:

• Start a blog. Blogging is our side-hustle just over a year ago we didn't think I would bring us any income . You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
• Save money with gift cards Whether its for buying clothes, your weekly shop or dining out use Zeek to buy discounted gift cards to get more bang for your buck. 
• Use Swagbucks for your online searches. Swagbucks is a passive way to earn gift cards. Over the course of a year you could earn $500.  Swagbucks is just like using Google to do your online searches, except you get rewarded “points called SB” for the things you do through their website. Then, when you have enough Swagbucks, you can redeem them for cash, gift cards, and more. Receive $5 for signing up today.
• Try matched betting. Matched betting is a great way to may easy money online. Despite the name it is not gambling and could see you earn £500-£1000 a month for only a couple of hours work a day see here and here. For your free trial head to profit accumulator or join the Facebook 'getting started' group.  
• Sign up for a cashback site like Quidco. where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free £10 bonus!

How much should you pay a babysitter?

I was recently reading a Dave Ramsey article about underpaying your babysitter and I began to think how much should a babysitter be paid. In my teens I babysat for a couple of families in my village. Though not set hourly wage was every given it would work out approximately £5 an hour. which is well above the £3.79 that is the legal minimum wage for under 18s. However, I stopped babysitting in my teens when I realised I could earn a lot more waitressing (£7.50 p/hr), its important that wages for babysitting remain competitive but it can be hard to know what to pay. 

I don't think there is a clear amount that you should pay and there are a lot of factors to include.

1. How much of the time will the children be asleep and how much was spent playing with the children? If they were asleep the majority of the time (or if you put them to bed before she got there) then the pay should be less than if they spent a few hours playing with the children. 

2. How old are the children and how many are there? The more children and the more younger children the more the pay should be this is because more children are more work and younger children require more attention and supervision. 

3. What is the age and experience of the babysitter? A young teenager should be paid less than an qualified nanny. But don't just use age to determine, look at experience and how long they have been babysitting. If they have been babysitting with you for years then they will have gained experience and pay should be raised to reflect this. 

4. Does she cook diner for kids or clean the house? Did she have to pick the children up from school or take them to an extra curricular activities? These are going above and beyond what is normally required and are worth paying £1-2 an hour more, especially if she does these things unasked.

Sadly there is no easy fool proof price to pay. However, I would say to take £5-6 as the starting point and then work through these questions and seeing if they apply to the situation. At the end of the day you children's safety is not worth pinching pennies on. 

How to watch TV for free

The average cable subscription in the USA has just hit $100 a month and they are increasing at crazy levels (up 39% since 2010). Now is the time to look into alternative options for TV.
But it is possible to never pay a penny for TV, that means no crazy cable subscriptions, no TV license fee, nothing. 

There are some great online TV viewing services such as Netflix, Hulu and AmazonPrime that cost a fraction of the price of cable and are great alternatives. But they aren't free so if your looking for the ultimate money saving option for TV viewing then keep reading. 

All you need is an internet connection and your ready to go.

The TV license is required when you are watching live TV and is £145.50 a year. But it is not required when you are watching play-back. This mean you can watch services such as BBC Iplayer, 4od, ITV player and demand 5 for free a they all offer delayed showing of the live TV of the main UK TV channels. It the same high quality TV, and the exact same programs you would watch live but just at a different time and on-demand, which in many ways makes it more convenient. 

* Update- New laws require you to have a TV license to watch on demand TV. However, there is a loophole for students, if you parents have a TV license and you watch it on a device that is not plugged into the mains (i.e a laptop not on charge or a mobile phone) then you don't need a license*

Students can watch amazon prime FREE for 6 months

Amazon Student gives you free six month subscription of amazon prime (including its online video service). All you need to do is use your academic email to register and your ready to go. Team up with your friends and stagger your 6 month trials back to back to give you free TV throughout the whole of your degree. Be sure to cancel before you are charged the £39 fee upon the end of the 6 months trial. 

Sinking funds and why you NEED them

Within the future there are expenses you will want to plan for to ensure as few emergencies occur as possible.

There may also be bigger long term goals that you are working towards.

A new car or solar panels for your roof. Really it could be anything.

But to buy it your going to have to save up for it to avoid going into debt.

What is a sinking fund?

A sinking fund is a savings pot that you contribute regular amounts to because you have a mid-to-long term savings goal. It is there to prevent delving into your emergency fund as that money is for the unknown. 

It is more specific than a savings account as you know how much you are going to save and what you are going to spend it on rather than just putting money away until you need it. 

Here is an example

You want to save £2,400 for a deposit for a rental flat and you want to be able to do it in one year.

£2,400 = 12 x £200

So you could achieve this goal in 12 months by saving £200 a month

Why have a sinking fund?

It is important to have a sinking fund as to avoid emergencies and dipping into your emergency fund.

You should have a sinking fund for car and home repairs as these are things you know will at some point need repair.

It can also be good to have sinking funds for other expenses such as back to school, birthdays and Christmas.

We use sinking funds for several goals

• Annual, Bi-Annaul and Quarterly Bills  (we have an account for gas and electric which don't come out monthly so we set up a standing order to go out each month).
• Vacation fund (we used this when saving for our vacation this summer though it is currently empty, when we start planning our honeymoon we will use this again).
• House deposit- C and I are currently saving for a deposit on a house and this is by far the longest term goal of our sinking funds.
• Bar exam- I have been saving for the past few years towards the cost of my bar exam this is also a longer term savings goal. 

Where to keep your sinking fund?

You want to keep your money somewhere where you are not going to easily touch it, but conversely it needs to be easy to access in case of an emergency. 

When determining the account look at what your sinking fund is for. Is it for a goal where you are going to have a good period of notice before needing to withdraw such as a deposit fund. 

Or would it be a fund where you would need immediate access in case of emergency such as a car repair fund. 

With that in mind you have a couple of options

• Cash- If your prefer to use cash envelopes consider setting up envelopes for your sinking funds. This will provide you with the quickest access if you need it (but be aware of the temptation to spend the money). Also remember cash earns no interest so if you sinking fund goal is longer term consider the impact of this. 
• Easy access E-savings accounts- This give you instant access- we use the ones attached to the Lloyds bank account for our car fund, bills fund and vacation fund. This is by far the best option as it provides the greatest level of flexibility and means it is easy to transfer money in and out. Plus a small amount of interest will be earned whilst there is almost no risk (as its likely to be covered by the FSCS)
• Premium Bonds- These give you 3-5 working days access and we use this for some of the bar exam money and house deposit money.
• Peer to Peer (P2P) lending- These accounts have 30 days to access and we use this for the remainder of the bar exam and house deposit money. But remember this is higher risk investment.