SO, YOU think you can adult?
You pay your rent on time, can iron pleats like a boss and clean out your fridge regularly. But you live pay cheque to pay cheque and have no idea where all your money goes each month.
If that sounds familiar, you're not alone. One in two working Australians live payday to payday and more than half have no regular savings plan, according to an Ernst & Young survey.
Almost one in five people would struggle to come up with $1000 to cover an emergency expense.
With dire stats like this, it's no wonder big financial goals like buying a house can seem out of reach. If it's a battle to afford an emergency root canal, scraping together a house deposit will be impossible.
But with a few basic rules and some back end tweaking, it is possible to get your finances sorted and start accumulating some savings.
We asked two financial advisers for their tips on how to get your bank account into tip top shape.
APPLY THE 50-30-20 RULE TO YOUR INCOME
This is how you should be dividing up every dollar you earn, says financial adviser Lisa Barber.
"It means 50 per cent of your income goes towards committed expenses like rent, bills and food," she said.
"Then 30 per cent is discretionary spending, so things like getting your hair and nails done or going out to dinner. The other 20 per cent should go into savings."
Ms Barber says this formula is the best way to make sure you know where your money is going.
"Quite often when you don't know where your money is going, it's often in that discretionary spending area."
"Sometimes our discretionary spending can be 105 per cent of our incomes.
"I know 20 per cent savings is a pretty tough ask when you're adjusting from no savings. It will take some adjusting, but it's a good measure."
YOU DON'T NEED A STRICT BUDGET AND AN EXCEL SPREADSHEET
Ben Nash is the founder of Pivot Wealth, a financial advice firm for young people. He says young people spend unconsciously and don't check their bank statements, which allows their spending to get out of control.
"With young professionals, their cash flow is the driver of whatever results they get. So many people just spend all their money," Mr Nash said.
"With tap and go and credit card limits being so high, you don't have to think about your money, you can just spend it. When you have to balance your cash flow at the end of the month and you think 'I was supposed to be saving $1000 each month, where did my money go?' It always happens."
The solution doesn't have to be a militant-style budgeting system. In fact, Ms Barber says she doesn't believe in budgeting.
"It's a bit like dieting. It's not sustainable," she said. "It's like losing weight. If you lose weight really quickly, when you start eating properly you will put the weight back on. It's the same with money.
"If you deny yourself too many purchases, then you just don't be happy and you'll have a big blow out. It's better to allow yourself to have the discretionary spending, but in small amounts. So instead of getting a manicure every fortnight, get one just for special occasions. It has to be sustainable, otherwise it won't work."
START TOPPING UP YOUR SUPERANNUATION NOW
"People don't want to get involved in their super because it's such a long way away. But I always tell people to be as active with your super as you are with your money in the bank, because 9.5 per cent of your wage goes into that account," said Ms Barber.
It's all because of compounding interest. Even if the initial amount is small, the longer it stays in your super account, the more time it has to accrue compound interest.
"A recent study looked at this and found that if a 23-year-old started to put $50 a month before tax into their super fund and stopped after six years, they'd end up having more super than a 29-year-old who started invested the same amount right up until they were 65. That's the power of compounding interest," she said.
"The earlier you start, the better. By the time this generation gets to age 65, there will be no pension, it will all be self-funded. So you want to have as much money in your superannuation account as possible."
DON'T AUTOMATICALLY THINK YOUR GOALS ARE OUT OF REACH
Sit down for an hour and plan your goals, says Mr Nash. Once you have a timeline and a breakdown of your costs, it won't seem so difficult.
"A lot of people think money management should be really easy and they struggle for years, putting it in the too hard basket," he said.
"You want to buy a three-bedroom house in Bondi and you look at the price and it seems impossible. A lot of people don't realise how achievable the goals they want actually are.
"They say 'It's going to take me years to get into the property market' and they find out they can do it much easier than they thought, once you have a timeline and set goals."