Making Cents with Liam Croke: Six good financial habits to form when young

Liam Croke


Liam Croke

Making Cents with Liam Croke: Six good financial habits to form when young

Young people have a unique opportunity to set themselves up for success in the years ahead

I was asked to carry out a presentation to a group of 20-year olds last week and it occurred to me that the advice should be different from other groups I would speak to?

Your 20s are the beginning of your financial life. Up until now, the vast majority of it was funded by someone else. But now, you should be starting your first real job, and ready to cut the financial umbilical cord from your parents, if they haven’t cut it already.

Unlike your parents, who probably didn’t have a choice and had to work for 40 or 50 years, things can be different for you, and whether you know it or not, your 20s are your big chance to create financial habits that will develop and improve over time leading to a financial life full of options and choices.

Of course, you could adopt the ‘life is for living, some people have pension funds I have ticket stubs’ attitude, but it’s one you will regret. You will get to a period in your life, where you will feel more grown up, and ready to become an adult and want, for example, to buy a house and will look back and think, yeah, I had a great time, but financially I’ve nothing to show for it.

You might wonder how everyone else you partied with is buying houses, except you, and then it will dawn on you - they looked after their finances and saved whilst having a good time as well.

You’ll think, God, were they putting money into a pension as well?

They might have been embarrassed to admit to any of this to you, but they did it. And now, with your 20s behind you, you will begin to realise that from a financial perspective, you are years behind them. They might be five years into a mortgage on a property they own, and you are still renting, and still haven’t even half a deposit saved.

Or maybe your friends weren’t saving to buy a house at all and their plan was to work less when they were in their 40s, and that was the reason they were saving 15% or 20% or whatever of their salary in their 20s.

You have a unique opportunity to set yourself up for success in the years ahead, whatever that may be, and make no mistake, your financial situation will have a big say either way. It doesn’t mean you can’t enjoy yourself either and become too serious too soon. It doesn’t have to be that way.

I thought of six formal headings I would leave the group with, and want to remember from their hour with me, and they were.

1. Follow the money

Follow the money on a monthly basis. It has an impact on every aspect of your lives. Making a budget is the single most important thing you can do with your finances if you want to control your spending and increase your savings.

2. Cost your goals

Having a budget in place will help in this instance as well, because it will help you identify the amount you can save and how quickly you will be able to save the amount required.

Knowing how much you need to save will allow you reprioritise your existing expenses. For example, if you need €5,000 to go on holiday, in 18 months’ time, you need to save €278 each month. It makes diverting some of the money you are currently spending away from particular areas much easier because you have a reason to.

3. Avoid credit card debt like the plague

Don’t spend money on credit if you can’t pay it off within a month. They have their benefits but the day you spend money that you can’t pay back is the day you begin to sabotage your finances.

4. Be mindful of the CEO Mindset

Don’t fall into the trap that now you are working and earning a good income and working for a prestigious company that you need to change your spending habits. You need to spend according to the budget you have and not the lifestyle you think you should be living.

5. Check your accounts

Don’t go a week without checking the balance in your account at least twice. You need to confront the reality of what your income and outgoings are however painful that might look.

6. Save, Save and Save

Don’t think your savings will magically appear in the future. When you’re young it’s easy to think of your current and future self as two different people and pass on the responsibility to the future you.

The future becomes the present so don’t think staying out of debt is enough, you need to start saving was early as you can. Being young is the secret shortcut to increasing your wealth because it means your money has more time to multiply. Don’t be fooled into thinking that saving and investing is for people older than you – it’s not.

Liam Croke is MD of Harmonics Financial Ltd,

based in Plassey. He can be contacted at or