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Rediff.com  » Getahead » 7 money lessons for 20-somethings

7 money lessons for 20-somethings

October 27, 2014 09:54 IST
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Because starting to save early hasn't killed anyone! :-)

 

How often have we wished we'd saved more in our 20s, not mounted that credit card debt or just simply been wiser with our expenses!

Here are seven money lessons we would like you, our 20-something readers, to know!

1. The best time to start saving is right about now.

Don't wait to start saving.

It is easy to procrastinate and put away your savings for another day.

Instead of blowing up that extra cash (if you have extra cash that is) at the end of the month, consider putting it away.

A recurring deposit scheme is one of the best ways to start out in your financial journey -- put away a small amount every month in the bank and receive a lump sum at the end of the year (sounds pretty great doesn't it?)!

Keep aside 10 to 15 per cent of your take home pay as an emergency fund because you never know when you'll need it.

We'd even say start on your retirement fund but we know how measly the salaries can be! :-)

2. Watch your credit card spendings

Ah the wonder of a card that, with a single swipe, can pay for every single thing you want!

But the sooner you realise that there are no free meals, the better it will be for you!

Credit card debts have a way of sneaking upon you -- that dress, that bag, that new suit, those shoes or that spanking new iPhone, all of that adds up!

Before you swipe that magnet strip, ask yourself if you really need those things.

3. Do not compare

Comparing your status with that of your friend who's just graduated from a top notch business school isn't one of the smartest things you will do.

Sure, seeing pictures of your friends' vacations and their swanky new cars on Facebook can hurt.

But remember you're not the one with a business management degree from an IIM!

So instead of comparing with your friends, set your own goals and live up to them and make your own path and tread along it patiently!

4. Get out of debt

Unless you are born with a silver spoon, it is impossible to get through life -- at least the first couple of decades -- without debt.

Expenses are unavoidable -- buying and furnishing your home, buying a car, getting married -- and there is a good possibility you will have to turn to borrowing money.

Know that you don't have to spend two or three decades repaying your mortgage and other debts.

Planning your finances can hasten the process but the important part to remember here is to NOT add more debt.

5. Invest in yourself

20s are a great time to go back to school and upgrade your knowledge.

Rather than going for a job that pays you somewhat well but takes your entire day and your night opt for something that gives you the time and invest that time in a professional course.

Get yourself that master's degree or pursue that doctoral thesis. Earn a professional degree that will help you a few years down the road.

The 20s are a great time to learn and add those enviable degrees to your resume. Make the most of them!

6. Prepare for life changes

This decade is also the one in which you will witness the most life changes -- marriage, children, home.

Take all these things into consideration when you are planning your finances.

7. Live like you're still in college

There is no harm in living a lifestyle you had in college -- frugal and basic.

Of course no one's asking you to resort to Maggi for every lunch, but being conscious of your expenses like you were in college isn't a bad idea.

Spend a few years in a paying guest accommodation instead of renting out a full apartment.

Learn to cook so you don't spend a lot of money hiring someone to do that for you!

Clean up behind yourself so you don't have to pay for the domestic help.

Shop at a local store rather than a branded one; buy second hand books rather than new ones -- the options are unlimited.

20s are the most crucial years of one's life. Make the most of it! Plan well so you don't have to live paycheque-by-paycheque for the rest of your life!


What are the money lessons you'd like our 20-something readers to know?

Here's your chance to share your words of wisdom with the young ones.

Post your suggestions on here -- #Money-Tips -- and we will carry the most relevant advice right here on Rediff.com!

Image used here for representational purposes only.

Photograph: Sehroiber Graphic/Creative Commons

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