it’s my story 

This article was written prior to 15 March 2021, before the launch of the new Financial Advice Regime, and was published for information purposes only. It is not being actively promoted by Momentum Life. Momentum Life does not provide financial advice about the suitability of their products and cannot take into account your personal situation or goals. Before you decide to take out a Momentum Life Policy, you should read the relevant Policy Wording document which contains the terms, conditions, and exclusions of the Policy, and seek independent financial advice, if required, to ensure the insurance policy is suitable for you.


Being young is all about learning from your mistakes. You’re keen to start your life, and perhaps don’t mind failing once in a while. It’s these experiences—both good and bad—that help shape our personality, build our resolve and prepare us for what lies ahead.

But when it comes to money matters, it may pay to take advice from those who have been there before. Your financial future is where you want to put your best foot forward as much as possible.

So if you’re under 40, here are seven money mistakes you might want to avoid making:

1. Spending your entire paycheque

We tend to be more carefree about life when we’re young. It’s sometimes hard to imagine bad things happening. Losing a job, getting into an accident or dealing with a leaky roof happen to other people—not you!

But, life is often unexpected, and there’s always a chance that your car could break down or you’ll be made redundant. That’s why you may want to start an emergency fund instead of living paycheque to paycheque. Consider setting aside enough to get you through an extended rough patch (such as 6-8 months of expenses), just in case.

2. Living off credit cards

If you’re the type to spend your wages every week, then you might also be using credit cards to fund your lifestyle. Afterall, you work hard. You deserve those nights out, shopping sprees and holidays, right?

Relying on a credit card may not be a wise decision, especially if it’s because you’re trying to “Keep up with the Joneses”—that is, friends or colleagues who are earning a bigger paycheque. Saving up for shopping trips or other luxuries might take more time (and mean saying “no” more often), but it won’t leave you in debt either. 

3. Always picking up the tab

Perhaps you’re the one who makes a bit more. You might feel obligated to always pay for a round of drinks, cover your partner’s share of the rent or loan a friend money now and then. Hopefully, if the shoe is ever on the other foot, they’ll help you out too.

Helping a friend in need is noble, but you may want to take stock of how often you’re paying the bill. If you constantly pick up the tab but are never repaid, you might need to start saying no or suggest splitting the cheque more fairly. Afterall, putting money into your savings account is probably a wiser strategy than relying on help from friends who may not be able to afford it.

4. Not setting money goals

Maybe you’re a natural saver, but a lot of people aren’t! Finding the discipline to set aside a portion of your paycheque each month can be tough, especially if you’re not sure why you’re doing it.

We all know that it’s good to have money saved up for a rainy day, but if you don’t have a specific reason for saving you might be tempted to borrow that money to fund some immediate fun. Setting a money goal—whether it’s a house deposit or your next holiday—can give your savings purpose. You may find it easier to leave it in the bank knowing that there’s an end goal you want to achieve.

5. Avoiding the “money talk”

Your 20s and 30s might be a time for romance. Dating, starting new relationships or settling down can be exciting. But talking about the finances with your significant other? That doesn’t sound like fun at all.

Relationships are about getting to know each other, and that might mean learning how you handle money alone and as a couple. Hashing out points of conflict, the household budget and your shared financial goals could all be important to building a happier future together.

6. Brushing off life insurance


Your grandparents and parents may have a policy, but you might want to be covered, too. Life insurance is designed to replace lost income, meaning it might make even more sense when you’re young. Plus, many policies pay the benefit if you’re diagnosed with a terminal illness, something that sadly affects both the young and the old. 

7. Forgetting about retirement

You’re young and busy, with heaps on your mind already. Why worry about retiring when you’re still decades away from it happening? However far off retirement may be for you, it might pay to start saving up as soon as possible.

Recent figures from Massey University show that saving for retirement should probably start with your first paycheque. A single person may need to save around $182,000 by age 401 to afford a comfortable retirement at 65! If you haven’t started saving just yet, you may not want to waste any more time.

Looking for more ways to help boost your financial future? Try these 6 money resolutions.

1. NZ Herald, Want a comfortable retirement? You'll need $101k by age 30, 28 Dec 2018

About Author: Momentum Life is a leading provider of Life insurance and Funeral insurance in New Zealand.

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Disclaimer: The information provided in this article is of a general nature only and does not take into account your personal situation or goals. You should consider whether the information is appropriate to your needs and seek independent financial advice, if required, to ensure an insurance product is suitable for you.

Any product information is correct at the time this article was published. For current product information, please visit the Momentum Life website.