12th September 2018

Financial tips for twenty-year-olds: here's what you need to know

First time at university, first job, first salary, first flat... and the list goes on! Life in your twenties is exciting. Everything is new and there is a myriad of ways to design your life. It doesn’t seem necessary to think about financial protection! However, now's exactly the best time to do so!

Time to grow up

As soon as you start earning money, day-to-day costs also suddenly increase as you are no longer entitled to many benefits or student rates. For example, you are no longer insured by your parents’ liability insurance, child benefits fail to materialise and you need to start paying back your student loan (if you took one out).

Hedging risks through good financial planning

Don’t panic!

Although you might be overwhelmed by the many costs stacking up, it’s important to look to the future and check off the following two points:

Protect today

Take out your own personal liability insurance
Take out your own personal liability insurance
You never know what can happen! One false move and you’ve spilled coffee all over your best friend’s laptop.
Keeping an eye on your finances
Keeping an eye on your finances
If you regularly check your finances, you can see which unnecessary purchases you can get rid of or limit. You can keep a classic budget or use online tools like MIA.
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MIA is free, sorts your spending into categories and automatically calculates how much money you still have left per month.

Secure your future

Current buzzword: private pension scheme

It doesn’t sound very appealing to think about old age now, does it? That’s true, but if you want to enjoy your retirement and newly-won freedom with holidays and all the associated benefits, then you've got to think about it. State pensions are nowhere near enough to be able to give you the standard of life you want in old age.

Thanks to a private pension scheme, you provide for your future with regular savings deposits. When the agreement matures, at the earliest at 60, you have the option of a one-off payout of the collected assets of a payout in the form of a monthly payment (for the entire amount or a partial amount of the collected assets).

You also already get something from your private pension scheme today! You can offset a maximum of 3.200 euros of premiums paid against your taxable income per year.

Building loan contract

You don't want to spend eternity living with your parents or paying rent? Then you'll face the question of buying your own home one day! With a building loan agreement, you can save to purchase, build or renovate a home over several years. Here are three good reasons why you should take out a BHW building loan agreement:

Remain flexibel
Remain flexibel
The BHW KomfortBausparen formula is aimed at young working people and offers a secure credit interest rate of 0.2% per year as well as the possibility to benefit from special conditions for a home loan. There's also a youngster bonus: Everyone under 25 years receives 0.6% on their building savings total.
The BHW building savings agreement can be offset against tax
The BHW building savings agreement can be offset against tax
Since the tax reform of 2017, the deductions applicable in the framework of a home savings scheme vary according to the age of the taxable person. Thus, if that person is between 18 and 40 years old, they can deduct 1.344 euros.
State guarantee
State guarantee
The BHW agreement has the advantage of blocking the money saved until maturity. Why is that a good thing for you? In order to take out a housing loan with the Bank, you need to have basic capital. If this is not the case, the government may warrant for your loan via a government guarantee but only if you've managed to save 290 euros each year, during 3 years in a savings account and have not taken out any of the money during that same period. As the building savings agreement automatically blocks the savings amount, it could allow you to benefit from government assistance.

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