14 Practical Money Hacks I Wish I Knew in My 20s

I wish I could tell you that I have always been great with money.

That I started selling lemonade at the tender age of 6, worked part-time throughout high school to save up for college, sought out high-paying summer internships during my undergraduate years, and invested every penny I had in high-quality dividend stocks when they were only half of today’s prices.

But none of that happened.

The reality is, I wasn’t the type of girl people would point at and say, “now that girl, she will become rich one day.”

I’ve never shown much interest in setting up a lemonade stand at my parents’ yard sales. Fancy internships never made their way onto my CV. And the salary of my first “grown-up” job was nothing to write home about.

All that is to say, I didn’t take my money all that seriously until I was well into my 20s.

Perhaps more importantly, I just didn’t know any better.

Looking back, I don’t regret that I had a late start in wealth accumulation.

But knowing what I know now, if I were to go back in time, I might have made a couple of different choices to strengthen my finances for the future me.

Now I want to share the money hacks I wish I was aware of early on in my life.

1. Take advantage of your employee benefits

I work for myself, so I have zero employee benefits to speak of.

But for those of you lucky folks who work for companies that provide comprehensive employee benefits packages, don’t let it go to waste.

Employee benefits are considered part of your compensation package, so if you’re not taking advantage of them, you’re basically leaving free money on the table.

The most common benefits include defined contribution plans, student loan debt reimbursement, dental benefits, contribution matching, paid maternity or paternity leave, free classes, healthcare insurance, and catered lunches.

In my eyes, any benefit trumps no benefits.

If I were to ever go back to working a permanent job, I’d make sure to pick an employer that offers some sort of employer matching program (which is, in my opinion, one of the best employee benefits for twentysomethings and thirtysomethings).

Let’s say a hypothetical employer contributes 50 cents to every dollar you invest in retirement savings, up to a maximum of 6% of your annual income. Assuming that you make $65,000 a year, and contribute $7,800 yourself, your employer will throw in another $3,900 (6% of $65,000, and half of $7,800) just for kicks. Hooray for free money!

Even “minor” perks like catered lunches and dental benefits can save you thousands of dollars each year, which is nothing to sneer at.

Not sure what your benefits are? It might be as easy as emailing your HR department, or consulting your employee handbook.

Bonus tip: if you’re strapped for cash and your employer allows you to cash out unused vacation days, consider taking fewer or shorter vacations this year, and use that extra money to pay off debt or beef up your emergency fund.

2. Shop at consignment stores

Keeping up with fashion trends and buying quality garments can be expensive.

But for people holding professional (especially client-facing) jobs, there is usually no getting around it.

So how do you keep your wardrobe updated inexpensively?

Say hello to consignment shops!

Consignment shops sell unused or lightly worn brand-name pieces on behalf of individual sellers, usually for a fraction of the original price, making it possible for savvy savers to snatch up great bargains.

3. Take advantage of bundle offers

Companies (most notably in banking, insurance, software, and car industries) like to offer package deals to get more business from you.

The most common bundle offers include:

• Internet + TV + home phones
• Car insurance + home insurance
• Chequing account + credit card + savings account

With bundle pricing, customers get a package of products or services for a lower price than they would if they bought all of them separately.

That’s good news for people who plan on getting all the products or services anyway: they might as well get a bundle offer and save some money in the process.

Just be aware that not all bundle offers are equally appealing, so make sure to shop around to find the best deal.

4. Read personal finance books and blogs

As a personal finance blogger who always has a personal finance book on her “currently reading” bookshelf, I can’t stress enough the importance of reading.

I would go as far as saying that over 50% of what I currently know about managing my money comes from reading personal finance books and blogs, and it is great fun.

Bonus tip: jot down notes as you read or use a note-taking program like Evernote so you won’t forget the details of any actionable tips you read.

5. Travel in the off-season

For the most part, the travel industry makes the bulk of their annual revenue during the prime weeks of travel and jack up their prices accordingly.

So if you want to cut down your vacation costs, try booking your vacations during shoulder or off-peak seasons and avoid traveling during Christmas, March, and summer breaks.

Thanks to the heavily slashed prices airlines and hotels offer to draw more people in during the off-season, you could save a ton on flight tickets and hotel rooms.

And you’ll avoid tourist crowds too! Win-win-win!

6. Pay cash for everyday purchases

When we pay cash for a purchase, we become conscious that we are parting ways with our hard-earned dollars, in a way that we don’t always feel when we charge things to credit cards and debit cards.

The physical act of taking bills out of our wallets makes spending seem more “real.”

With that in mind, it’s not crazy to assume that we could naturally curb our spending impulses by only using cash for non-bill purchases.

Here’s how I would approach it:

First, create a realistic budget that allows you to save your target amount.

Based on that, decide how much you need for everyday purchases per week (think groceries, gas, eating out, snacks, coffee runs, etc.), and withdraw that amount at the start of each week and only spend cash.

With this method, you’ll more easily stick to your budget because you’ll know when you’re about to run out of cash, and the “discomfort” (for the lack of a better word) of saying goodbye to your money provides an added incentive to avoid spontaneous purchases.

Bonus tip: make it tough to take out your credit and debit cards by putting them in a hard-to-access compartment of your purse or leave them at home, so that it takes effort to reach for them. Think of it as a fail-safe measure for when you’re tempted to bust your budget because something you love goes on sale.

7. Automate small weekly transfers

The most effective ways to save money are sometimes the easiest ones, and this tip I’m about to offer perfectly falls into that category.

Imagine getting $20 taken out of your bank account every single week. How would that impact your lifestyle?

Chances are, you probably wouldn’t even notice it gone.

But this easy-to-overlook $20 could help you save a ton over time.

Simply set up a weekly automatic transfer of $20 from your chequing account to your retirement account, invest in index funds or ETFs, sit back, and watch your money grow.

Assuming a very conservatively estimated return of 4% per year, your $20 per week will turn into $11,774.09 in total after 10 years, and $55,001.12 after 30 years.

Those numbers just turned my eyes into dollar signs.

8. Unsubscribe from e-commerce newsletters

When I see an email from Crate & Barrel, ASOS and Umbra, I open it.

Even though I am permanently doing the “No Frivolous Spending” challenge, my curiosity gets the best of me. And, of course, I was tempted to buy something more than a handful of times because of those emails.

We’re mere mortals who appreciate quality things, especially when discounts are involved. That’s why email marketers craft these beautiful emails designed to get people to click through to their websites and fill our shopping carts with things we might or might not need.  

The only way to combat this is to unsubscribe from all marketing emails, preventing these emails from ever reaching you in the first place.

No email, no temptation. Problem solved.

Near the bottom of every marketing email, there should be an “unsubscribe” (or “update your subscription”) button. Companies are required by law to put it there.

No clue which companies you’ve subscribed to? No problem.

From now on, every time you receive a new e-commerce newsletter in your inbox, open it, quickly scroll down to the bottom, hit that unsubscribe button, and high-five yourself.

Bonus tip: some online shops let you store your credit card info to speed up the check-out process. This is an excellent feature if you’re a shopaholic, not so great if you’re trying to cut unnecessary expenses. The best course of action is to delete your credit card info from these sites, so you would have to manually enter your payment details every time you make a purchase. It would make shopping enough of a hassle that you might second-guess that decision.

9. Apply the 30 days rule

This next money-saving tip might seem tedious and requires a bit of discipline, but it really works.

Whenever you’re about to make a large purchase that you didn’t budget for, put the idea on what’s called a “30-day list” and wait 30 days before buying it.

Your “30-day list” could look something like this:

After 30 days go by, if you still want to buy the item, go for it if it doesn’t break the bank.

But I bet that most of the time, your strong urge to buy will dissipate by then, and you’ll re-evaluate the potential purchase with a more objective pair of eyes.

10. Don’t underestimate the power of money meetings for couples

You already know that open communication is critical to maintaining a great relationship, and that couples in serious relationships should be on the same page when it comes to personal finance.

If you haven’t already, get financially naked with your partner by hosting regular money meetings.

Very few people like the word “meeting,” but money meetings don’t have to be boring or a waste of time.

Here are some suggestions for what you could discuss, in sequential steps:

1. Share your assets and debts, if there are any.
2. Figure out what each of you typically earns, spends, and saves in a month.
3. Determine short-term (this year), medium-term (5-years), and long-term (10-20 years) financial goals that both of you can wholeheartedly agree on.
4. Come to terms with spending expectations. Are there any joint expenses? What is the maximum each person can spend without telling the other person?
5. Create a comprehensive plan to achieve your financial goals. At the bare minimum, this plan should include a budget, ways to boost income, and investing strategies. Don’t worry if it’s not perfect. You could refine it later.

From there on out, money meetings will essentially become a series of check-ins to make sure that joint expenses are getting paid, debt is not getting out of hand, and you’re both making progress towards your financial goals.

11. Declutter your home and sell unwanted items

Minimalism is all the rage these days. The minimalist lifestyle gives you clarity of mind by simplifying your life, which is rewarding in and of itself.

What’s more: embracing minimalism comes with a side of financial benefits.

When you declutter your home, you could make an extra buck by selling your castoffs on eBay, Craigslist, or through consignment shops.

Once that’s done, you won’t want to buy things that clutter your minimalist space. As a result, the desire to own fewer material possessions translates to more savings for you.

Talk about killing two birds with one stone!

12. Enjoy free entertainment from libraries

When I was researching the neighborhood before buying our house, I was delighted to see that the house is a short 10-minute walk away from the local library.

I have a soft spot for Gone Girl-esque thrillers, but buying copies of every book I want to read seems wasteful. Borrowing from the library, on the other hand, is super convenient and pleasant. And I can find just about anything in the library that I can find in a bookstore.

Also, libraries provide so much more than just books these days.

Here’s everything I can borrow from my local library:

• Books (including audiobooks)
• Magazines
• CDs
• DVDs
• Games (even recently released console games)

These are solid entertainment options that cost absolutely nothing.

No more spending money on magazines that end up in the recycle bin.

No more spending money on music and movies that you only enjoy once or twice.

If you don’t like anything you’ve borrowed, simply return it. No harm done.

You’ll save oodles of money this way.

13. Pay insurance premiums once a year

If you’re paying your life or auto insurance premiums on a monthly basis, stop!

Chances are, you can save a decent chunk of money by making one big lump sum payment every year (double-check with your insurance provider to ensure that this is the case).

I’m currently saving roughly CA$250 per year on my life insurance, and 5% on auto insurance by making annual payments instead of monthly payments.

Because you need to have the payment available before it is due, you’d want to plan ahead. So consider setting up a separate savings account that you can make automatic contributions to each month to save up for next year’s insurance premiums.

14. Optimize your RRSP & TFSA investments

If buying dividend stocks is in your wheelhouse, this last tip is for you: hold your US dividend stocks in your RRSP account, not your TFSA.

Why?

Due to tax treaties between Canada and the US, dividends on US stocks held in an RRSP are tax-free because RRSP is set up exclusively to provide retirement income in the eyes of the IRS. Such is not the case for TFSA.

If your US dividend stocks are held within a TFSA, the dividend gains are subject to withholding tax (30% by default, 15% if you file the W-8BEN form with your broker).

Bonus tip: if you’re a passive ETF investor, make sure to check that your American ETFs are held within your RRSP (I’m assuming that they pay out dividends), for reasons stated above.

Final Thoughts

I haven’t always been great with money, but I am growing more financially confident each day by reading, learning, and applying what I’ve learned.

You can do the same.

There is no need to hold on to past mistakes.

The most important thing is that we are moving forward towards our goals.

I sincerely hope that you have learned something new from this article, and that you’re eager to try it out.

Do you have a money hack that has changed your life for the better?