Oh to be 20-something again! There’s so much opportunity for younger women today when it comes to investing and just being better with money management.
In fact I’d go as far as saying that Generation Z and Y have never had it so good… but older generations always say that!
The rise of digital investment apps, such as the small change app Raiz and CommSec’s Pocket app, make it easier to have a go at investing with small amounts.
The difficulty will be in deciding which one to go with. My advice is to test systems out first using a small sum, and see which works best for you.
Jun Bei Liu lead portfolio manager for Tribeca Alpha Plus Fund says when it comes to investing in your 20s, women should be thinking about growth assets, such as equities.
“If you have the skill set to buy individual stocks then you want to look for good quality companies.
“But trading is a very labour intensive task, so if you don’t have the skill or the time do to the research and be on top of price movements, then look for a fund manager who can help you.”
Kim Hughes Chief of QInvest at QSuper says women in their 20s should be trying to master some of the basics, including budgeting, saving and credit management.
“Maintaining a good credit profile may hold you in good stead later. Learn about insurance and understand how superannuation works,” she says.
So what are the 5 top money and investment ideas for 20-something women?
- Get financially organised. Consider the ‘pay yourself first’ principle. This is where you set a target amount of savings and treat it like mortgage/rent – that is rather than saving what’s left after spending, you spend what’s left after saving.
- Check your super investment option. If you’re unlikely to need your super for 40+ years you can have a high proportion in growth assets. A decline in value when the market corrects shouldn’t impact you because you’re not using this money.
- Savings. Create an emergency savings fund. Typically with the best interest rate you can get with the access you need. Create a savings buffer to cover 6 months worth of expenses.
- Investing. Once you’ve created a savings buffer and have additional money to invest consider looking at low cost and growth investment options such as shares and Exchange Traded Funds (ETFs) that can provide diversification.
- Property. If you want to save for a first home, create a savings account to do so and find out about incentives like the First Home Saver Super Scheme.
This Financy article is a rewrite of one we provided to Yahoo Finance and it has been republished here with exclusive permission.