Being a millennial and leading a life different from the regular, completely on your terms is not a cake walk. Today, youth in their 20s grapple with finances at every step, much worse than that experienced by the previous generations, be it an earning professional or a young entrepreneur who has just vowed to make the best of his maiden venture.
On the other hand, the wayward economic conditions prevalent in the nation have been a good teacher to educate previous generations on how to manage finances judiciously. Taking a leaf from the conventional wisdom then, here are a few tips that will make savings in your 20’s easy.
1. Inculcate the habit of savings
Like every habit, savings is also a habit, and it needs to be self-inculcated. The first few days are tough, but once you get a grip of savings on regular basis, you will be surprised by the amount of funds you manage to accrue with time. If making frequent deposits in savings account is not your forte, then avail a recurring deposit with ECS clearing from your bank. For people who like to play it safe, open an RD (recurring deposit) account with post office. Within a span of 10–15 years, you will surely end up with a huge corpus of funds.
2. Seek the assistance of Financial Advisor
People in their 20s are generally young and unaware of the various options available in the market to make successful investments. However, successful savings do require advice from financial experts on matters like ROI, duration, investment risk, etc. If you are not particularly savvy with financial jargons, but are still looking forward to save successfully for a rainy day, approach a financial advisor. Be it an investment in bonds, stocks, mutual funds, savings plan, or any other financial instrument; seek assistance of financial advisor when it comes to make a lucrative choice.
3. Keep your Credit in Check
A new, well-paying job or early profits in business will surely allow you to experience the nicer things in life. The availability of credit cards and easy loans add to this excitement. Though the credit system was built for convenience of consumers, it is also a major reason for bankruptcy among individuals in their 20s. Avoid any eventuality of defaulted loans or missed credit card payments by reserving a part of your income. Try and clear high-interest rate loans in early years, and opt for short-duration loans, be it for house, car, or any other item or accessory of use. Moreover, avoid unnecessary expenses that will create circumstances to avail loans or make frequent credit-card swipes.
4. Invest in Yourself
Acquiring knowledge and availing higher education is the best investment anyone can do in their 20s. Enrol in a post-graduate program or certification courses that will enhance your work qualification. By engaging in such activities, you will not only broaden your knowledgebase, but will also be able to qualify for quick promotions, better salary packages, and improved CTC, all of which will enhance your capacity to save and experience better things in life.
5. Start Early and Diversify as You Grow
Start saving today, stop procrastinating. Several whole life savings plans that offer life-time savings benefits ask you to start early. Same is the case with mutual funds, life insurance savings plans, recurring deposits, or any other investment scheme available in the market. Early investments allow your invested corpus to mature with time, thus enhancing the ROI. Moreover, when you start early, you will get to know about various offerings at an early age (before 30), thus able to diversify your investment portfolio with different schemes and hedging investment risk at its best.