How to Build Better Spending Habits in Your 20s

editor — Thu, 21 May 2026 11:30:09 +0000

Building better spending habits in your 20s is more essential than ever. With the cost of food, fuel and any basic items rising every month, it’s never been more important to take control of your finances. In your younger years, it’s common for many young people to make mistakes with money. Whether you spend too much when you go out on the weekend or use all of your money on an expensive holiday abroad. It’s easy to make mistakes when you’re young and you have less of a grasp on money.

However, as you get older, ensuring that you spend and save your money wisely becomes and imprtant part of life. With expenses such as rent, electricity and taxes, mistakes with money stop becoming life lessons and start to become debt that can affect credit and get you into severe financial trouble. As well as this, with the cost of property and housing increasing, it’s more important than ever to ensure that you start saving early, so that you acn save and start investing in property and your future as early as possible.

This highlights the importance of introducing better spending habits in your 20s, so that you can start to take control of your spending and make better financial decisions. But how do you do this? Well, this guide will help you to identify where you’re making financially responsible mistakes and how you can change them for the better so you can take control of your finances and even start trying to save in your 20s.

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Pay yourself first

One way to manage money properly is to implement the ‘pay yourself first’method. This involves placing 10% of your income when you get paid into a savings account, after paying bills or rent. This works best when you have multiple savings accounts on your banking app. One to separate bills into one main account and a high-interest savings account, where you can place money to earn interest over time. This leaves you with leftover money, which is then your disposable income for the rest of your month, meaning that you don’t have to worry about saving money for the whole month.

For those who struggle with saving, adding an automatic transfer at the start of each month to a separate savings account will force you to save the money. Over time, you should be left with a significant lump sum which can be used for holidays or saved up for a house deposit.

Track every penny

Monitoring your spending throughout the months can help you to track where you are overspending. This is especially important if you have lots of outgoings for subscriptions, which many forget about, and can add up to a hundred pounds in some cases. This can be easly overseen if you’re not thoroughly checking your in and out every few weeks. In addition to tracking your outgoings can help you spot the main causes of your spending. Whether this be eating out or clothing, this can give you a guide on where to cut down to ensure that you can save.

Avoid lifestyle inflation

As you get that pay rise or start earning from you full time job, it can be tempting to start spending more, also known as lifestyle inflation. Maybe this is going out for dinner more often, getting your nails or hair done or even buying a more expensive gym membership. This can feel good at the time, but it can put unnecessary financial strain on you and your wallet. This can also include opting into buy now and pay later schemes such as Klana, for items such as dresses or shoes which are not a necessity or you know you will not wear more than once. Revealing these inflation changes that you are making can not only reduce unnecessary spending, which can be used towards something that really matters, such as a holiday or a mortgage.

Check for any money owed

Many people lose out on money and income from not checking what they are owed. This can be anything from a tax rebate, government payment schemes or injuries such as injury claims which you could claim for or check if you are owed. Many of these checks can result in hundreds or even thousands of pounds being returned that you are owed, which can be put into a savings account or put towards something more important. This is one of the easiest ways to gain money, especially if you know that you have money sitting somewhere ready to claim and save.

Final thoughts

Saving money in your 20s doesn’t have to mean sacrificing your lifestyle or your life enjoyment, it’s just about making smart decisions, whether that menas saving 10% of your income or filing for multiple injury claims. So, start saving and building spending habits that the future you will thank you for.