Money Lessons to Learn During Someone’s 20s
People often hear that saving early in life is the key to a financially sound and secure life. If someone starts saving funds from the very start, it will help them make a great financial life, and the saved funds can be used for different stages in life like education, wedding, raising kids, travel, health, and more. Money lessons are as easy as ABC if someone gets the basics right at the right age and at the right time.
If someone starts saving money from the early 20s, they will see that they are in a much better state when the talk is about financial standing. Follow some of the simple tips and tricks, in the long run, to be more monetarily stable in life from a very young age.
1. Learn How to Create a Budget
It cannot be stressed enough. Even if someone is not earning and all they receive is pocket money from parents, creating and maintaining a budget will help now and later in life. Jotting down expenses, needs, and savings will give a clear eye on how much money someone can save by not making unnecessary expenses on things that can be avoided.
2. Best Time to Begin Saving is Now
When someone is in their 20s, they tend to think they have their whole life to save money. Nevertheless, even if someone has a lifetime left to save money, the right time to start with the savings journey is now. One of the best ways is to open a zero-balance savings account, start putting money in the account, and earn interest on the saved funds.
3. Set Financial Goals for Future
In someone’s 20s, they have set an aim to become a doctor, engineer, scientist, writer, or make a name in any other field, but with that aim, they must also be setting a goal that talks about finances. Please do not feel it to be a tedious and complicated process. Start with near-future goals. For example, if someone wants to save a certain amount of money to help their parents financially to send them abroad for a master’s degree, then work in the same direction and save accordingly.
4. Learn Differentiating Between Wants Vs. Needs
Someone might want to live in a 3bhk flat alone and enjoy their life, but all they need is a 1bhk flat with good amenities in their 20s to have a decent living. It is the difference between what someone wants and what they need. Understanding this basic difference will save a good amount of money that can be used in a more required place.
5. Find Freedom from All Debts
Having a credit card or student loan is not a bad idea but must be avoided if not utmost necessary. Debts from a young age will keep someone under stress. Moreover, if someone has a loan or a credit card, make a point to spend under a strict budget and pay the bills on time to avoid unneedful interests.
6. Invest in Knowledge
Invest saved money on the future. This is the best age to gain knowledge and master expertise that will be gratefully helpful in the future. Understand that while someone is saving and making money, this is the perfect age to gain all kinds of knowledge in a particular field and investing in themselves will be like an investment for the future.
7. Start Putting Money in an Emergency Fund
The harsh reality is that emergency comes unannounced. Nobody ever knows when they will need money for some unavoidable circumstances. Be it emergency travel to a place, health emergencies, or others. It’s highly recommended to start the process of saving money in an emergency fund right from the early 20s to feel secure and safe when a time of emergency comes knocking on the door without any prior intimation.
8. Have the Right Insurance?
Student loans, health loans, and more kinds of loans are available for people in their 20s. The best someone can do is study and gain knowledge from all the service providers and have the right one for themselves. Look for the least interest and more valuable kind of insurance. It will help to save money and feel secure for any upcoming emergency in the future.
9. Weekly & Monthly Budget Meeting Can Help, too
Someone must have a budget while meeting their needs and expenses. However, if that sounds tough, they can start by having a weekly or monthly budget to start with. Meet the budget set for a week or a month and analyse how much more discipline is needed to follow this thumb rule of saving money and creating financial management.
10. Health is Wealth
Saving money for fancy and luxurious desires is all fun and games, but as the oldies have said, ‘health is wealth’. Health is surely the most prized possession anyone has. It’s highly recommended someone save a certain amount of money for health emergencies or be a part of any health insurance that covers clinical and accidental mis happenings.
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