The financial habits you set in your 20s will remain with you all your life, so making good choices now will set you up well for the future. Sure, keeping track of your spending isn’t terribly fun, but if it means that you’ll be able to afford those shoes, that holiday to Thailand, or the deposit on your dream house, then it’s worth it.

If you can meet our three goals, you’ll be well on your way to financial freedom.

Goal 1: Create a monthly budget
Most of us would rather not know how much we spent on clothes last month. But having a budget is the best way to stay out of debt - and to make sure that you’re getting the most out of your paycheck.

1. Head to the budget-making tool at sorted.org.nz. Just fill in your income and regular spending and it will calculate how much you have spare each month. No maths involved!
2. Sticking to a budget can be hard, so consider withdrawing your allocated spending money as cash at the beginning of each week. It’s easier to say no to something when it’ll use up the rest of your week’s money than if you’re just charging it to a credit card.
3. Can’t resist something new? The solution: don’t go shopping. Avoid places where you might be tempted to splurge—even if you promise yourself that you’re ‘just looking’.

Goal 2: Get rid of any debt
Owing money can be crippling, especially if it’s on a credit card. The high rate of interest means that you’ll end up paying much more than the label price of what you bought.

1. Draw up a plan for clearing your debt. How much do you have? How much will you pay towards it each week? How long will it take to clear? Figure this into your budget.
2. Always pay off the debt with the highest interest first. If you have a student loan, leave it until last, because you won’t be charged interest on it.
3. Once you’re out of debt, aim to stay that way! Pay off your cards in full each month and avoid hire purchase schemes and loans - the interest you pay vastly increases the label price. Instead, save up first and pay the full price up front.

Goal 3: Save or invest part of your paycheque
Experts recommend saving around 10% of your income. Putting money aside rather than spending it now might be frustrating, but trust us: it’ll come in handy later when the car breaks down or a cheap holiday to Fiji comes up.

1. Saving for something in particular? Keep a picture of it close by to remind you of your goal. For example, if you’re saving for a backpacking trip to Europe, stick pictures of Paris and Rome to your fridge - or keep them in your wallet.
2. Take a good look at your budget and see what you can do without. One less $10 lunch each week will give you an extra $520 a year!
3. If you work full-time, consider signing up to Kiwisaver. It’s an easy and relatively safe form of investment, and you can withdraw your savings if you’re moving overseas or buying a house.

Rebekah White