A person’s twenty is the time to make a career, to experiment, to take risks, to pursue your dreams, to work hard, and to have fun. They are young, free, and careless, with few responsibilities. There is no point in managing money at this age. That is because twenties are also a significant transition period and it is surprising to know just how much change in the next decade, thanks to greater responsibilities in career as well as your personal life. It is important to inculcate these two financial habits during the foundation years of life and career.
1. Savings:
Start by trying to maintain an amount equal to a month’s expenses in your account. Twenties may seem like an odd time to think about saving, but an early start indicates a faster growth of money. Set an agenda and identify goals- either long term or short term.
How much to save? Save 30-40% of monthly salary: The more money made, higher the expenses are likely to be. Lifestyle costs tend to go up with income. The key is to save smartly and spend wisely.
How to save – Do these to save as much as 40% of your income
2. Investing:
For more information, contact Moneymindz, the best free financial advisory service.
How much to save? Save 30-40% of monthly salary: The more money made, higher the expenses are likely to be. Lifestyle costs tend to go up with income. The key is to save smartly and spend wisely.
How to save – Do these to save as much as 40% of your income
- Avoid going to expensive eating joints. Leave fine dining for special occasions unless you like being in debt. Alternatives could include organizing a house party or cook at home.
- Stay with family at home. You can save on rent and utility bills, which is a major cost for most people in their 20s. This way, you can also help your family by paying utility bills, if not rent, and hence share responsibilities.
- Try making use of public transport facilities like metros or buses. Carpooling is a good option if you have access to it.
- Avoid buying things you do not need. For example, do not invest money in hobby classes you would not be able to attend.
2. Investing:
- Early in your working life, it is very important to make a few but smart, long-term investments. Construct your financial plan, identify your long-term and short-term goals, and choose appropriate investments to match your goals. Here are a few tips to get you started:
- Employee Provident Fund: One of the most effective ways to save, EPF mandates at least 12% of your basic salary and a matching contribution by your employer, hence making a subscriber to the EPF able to accumulate a decent amount by the time he retires. It is normally a mandatory deduction and thus automatic savings.
- Equity Mutual Funds: Among the best means to build a retirement fund, Equity Mutual Funds invest in the shares of companies and have many advantages, like expert management and some of the highest long-term returns.
For more information, contact Moneymindz, the best free financial advisory service.
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