Your twenties can be a pretty exciting decade.

You’ve got the freedom of living away from home, your first proper job, a car, and perhaps other milestones like marriage and kids on the horizon.

With more disposable income than you might have had previously, it’s tempting to get carried away with your spending – especially in these days of wireless, contactless and electronic payments where you hardly find yourself handling cash at all and it can be easy to forget what you’re really handing over.

But once those first few pay cheques have disappeared and you’ve got your house/car/wardrobe kitted out as you want it, it’s time to take responsibility for your finances because forming good habits now will help give you more financial freedom in the future.

Following these five money habits in your twenties (and encouraging your kids to do the same) is something you’ll never live to regret. And if you’ve missed the chance to start in your twenties, well, better late than never!

1. Make a budget

It may not be your idea of fun, but keeping track of your income and expenses is the foundation to managing and saving your money.

Before you groan and skip to the next point, check out our budget guide which takes you through a few easy steps to get you started.

There are plenty of apps available that will help you track your spending until it becomes second nature to you, so take a look at what’s on offer and find one that suits you.

Once you can see exactly what you’re spending, you can identify the areas where you could cut back or spend more wisely so you’re left with more in the bank at the end of each month.

2. Get excited about saving

Automatic transfers are your friend here. If you know you don’t have the willpower to stick to a strict savings plan, let the internet banking fairies do it for you.

Transfer 5-10% of your salary on payday, and you’ll never realise it was there in the first place. Trying to keep that same amount in your bank account all month long is enough to test even the strongest willpower!

To get the most from your savings, put your money into a high-interest savings account. You’ll probably get better rates from one that has limited withdrawal policies, and these offer the added bonus of deterring you from dipping into your savings too frequently.

3. Avoid bad debt

“Don’t buy anything unless you can pay for it in full!” It’s the kind of thing your grandparents might say, but there is a lot of wisdom in this attitude to spending.

It’s easy to use a credit card to pay for that new pair of shoes, the latest gadgets, or a much-needed holiday, but if you’re spending money you don’t really have then you’re going to end up paying back a whole lot more in interest.

If you really want something, plan ahead and save for it in your budget. The pain of delaying the purchase by a few months can be offset by the satisfaction you get from knowing you worked hard to save for it.

If you really need to get credit for something, shop around for the best deal on loans and credit cards. Under absolutely no circumstances should you consider getting a loan from a payday lender; the interest rates they charge are the definition of extortion.

4. Don’t be afraid of a few risks

Now we’re not talking about heading to the casino every time you get paid. But there are plenty of ways you can invest your money sensibly, giving your 40-year-old self something to thank you for.

The good thing about investing young is that although you may lose out in some places, you’ve got time to make up for that, and other investments that do work out will have plenty of time to mature.

Get yourself some good financial advice from someone who knows their stuff (ahem) and think about investing in some shares or property.

Quality is the important thing here. Any ‘get rich quick’ schemes you might come across are probably too good to be true, but invest wisely, be patient, and you’ll be able to reap the rewards later in life.

5. Set yourself goals

Saving is a whole lot more meaningful when you’re working towards something specific, so set yourself some short and long-term goals.

Whether you want a big holiday next year or a spa day next month, save for it in your budget.

There’s no harm with being ambitious, either. If you want to have $1 million in the bank by the time you hit forty, there’s nothing to say you can’t do that; you just need to work out how you’re going to make it happen. Will a high-interest savings account be enough to deliver the results you want, or will you need to need to invest in something that offers higher returns?

Whatever you want from life, getting your finances in order while you’re young can only be a good thing, so don’t put it off any longer!