7 Financial Tips For Your 20s

Ever seen your parents draw up a list of expenses for each month? That’s budgeting, and it’s a very useful tool to streamline your expenses and start saving. Make a budget at the beginning of each month and itemise your expenses carefully. Then, make sure to stick to the budget, so that you’ll have some money to put aside towards savings.

As you begin earning, it might be tempting to splurge on the things you desire, but it’s wise to save first and spend later. This will help you save consistently and maintain prudent financial habits. Allocate at least a part of your income towards goal saving and spend money only from whatever remains. This way, you can spend without affecting your savings. 

Once you start saving, don’t just leave your money lying idle in your bank account. Invest it, so that it will grow steadily. You can opt for a mutual fund SIP to invest in equity, debt or hybrid funds and thus develop a disciplined saving habit. SIP investments will help you create a substantial corpus even by saving a little every month, generating strong returns to drive capital appreciation. 

Why depend on one source of income when you can diversify? Try looking for a side hustle that can create another source of income and help with your financial goals. Convert your talent into a fruitful venture that can help pay your bills and enable you to invest a little more towards your financial goals. 

If you have taken loans, focus on paying off the ones with higher interest charges. This will help you reduce your interest expenditure and increase your disposable income, allowing you to save more.

If you are planning on making a big-ticket purchase such as a gadget or luxury item, try and pay for it in instalments, especially if you can get interest-free EMIs. This will avoid making a big dent in your savings and instead, allow you to distribute your expenses over the next few months. 

Saving money doesn’t mean sacrificing your lifestyle – after all, you’re in your 20s and should enjoy life too! Rather than cutting down on your expenses, get creative with them. Travel in the off-season, or use coupons and cashback to save money. These habits will help you save and make you financially savvy and prudent.