Most 20-somethings have either just graduated from University or started their first jobs, accompanied by a multitude of student loans and a meager salary. While personal finance and investments might seem frivolous as this time of your life, it is never too early to start. Developing smart saving and investing habits early on, even in a small way, is extremely wise. Although this might seem daunting, here are five guidelines to help you along.

1. Setting sensible and achievable goals.
Once you have a better understanding of what your current fiscal situation is, you can easily create a plan for your financial goals. Focus on achievable goals and how you are going to get there. Create a strategy that is based on all your financial responsibilities, your short and long term financial goals and the ever changing economic environment. As with all good goals, the outcome should be measurable in what you what to achieve and when you what to achieve it by.

2. Clearing and avoiding debt
What could be more important than paying off your student loans or any other debt? It might seem like an overwhelming task, but one that must be done. Decide on a payment plan that suits your income and circumstances and stick to it. Do not miss payments and, wherever possible, live within your means as to avoid incurring more debt. In the case of serious debt, it would be advisable to consult a debt councilor.

3. Savings Account vs Emergency fund Yes, there is a difference.
A savings account should not be used lightly whereas an emergency fund is more easily accessible. In other words, a savings account is for planned expenses and an emergency fund is for those unfortunate and unforeseen expenses. An emergency fund should ideally amount to 3-6 months’ salary. Now set aside your hard earned money before it temps you or burns a whole in your pocket.

4. So, you got a raise? Congratulations.
I would propose thinking twice before you spend it all on things you don’t really need. Why not undertake to put a portion of any raise you receive in the future into savings. That way you save more money as soon as your earning capacity increases and you will notice the compounding effects of increasing your savings contribution.

5. Investments Simply put, Investment is an action or method of investing money for profitable returns.
In your twenties, that might not be a term you are all too familiar with, but don’t let that scare you off. It’s very important to do research before investing, but experience is after all the best teacher. Within investing you will find long-term as well as short-term investments. Per the financial plan and goals you have created for yourself it is easier to identify what your long and short-term goals are and which investment opportunities are best suited to help achieve those goals.

We live in a time where an abundance of resources are readily available to us. Make use of them and learn, learn how to invest in something as unassuming as a savings account. Find out what unit trusts, bonds and shares are, and if they are suitable to your financial situation and how. You are in control of your success, financial or otherwise.