Financial freedom comes with behaving responsibly with money. When you are in your 20’s, and working at your first job, the thrill of wanting to spend what you earn is quite natural. But, this is also the right age to start managing your money smartly. Prepare for a secure future by starting to save and invest carefully.
Here are some smart habits to develop to carve a path towards building your wealth.
1. Avoid the temptation to borrow money
Borrowing is a habit that can grow into an addiction if it is not kept in check. When you’re in your twenties, you need to stop using your family and friends as a fall-back for monetary needs. Say no to casual borrowing, which due to its lack of interest and late fee penalty, makes it harder for you to gain financial independence. True financial independence is only achieved when you stop borrowing and learn to manage your expenses based on the pay check that you receive.
2. Track your expenses smartly
Technology has made it fairly easy for you to keep a tab on finances. You can use apps to draw up a monthly budget, so you can get an overall view of your income and adjust your expenses accordingly. Track your spending behaviour to cut down on unnecessary expenses. Effective money management via an app will also ensure that you don’t overextend your finances.
You can also consider an auto payment system set for your house bills like rent and electricity, to keep yourself from forgetting to make important payments. The auto-reminder option on the app will also help you save before you spend.
3. Save with monthly FDs
If you’re looking for a smarter way to save money, consider the Systematic Deposit Plan by Bajaj Finance, wherein you can save Rs. 5000 per month and grow your savings easily. You can choose 6 to 48 deposits on a monthly basis, choosing a tenor of 12 to 60 months for each of your deposits.
These timely savings can help you fulfil your goals at a later stage, so you can fund expenses like buying a home in your thirties, or purchasing your dream vehicle.
4. Track the money you lend
It is not enough to track your expenses, but also the money you may end up lending. While lending money is unavoidable, it pays to track the amounts you lend, and follow up with the borrower, once you’ve lent the same.
5. Make investment plans to realise your financial goals
Your 20s are a great time to stay on track with finances, and create quarterly, bi-annual and yearly goals for best results. Consider dividing your goals into small and big ones. This way you can prioritize your goals and keep your expenses in check, as per the financial goals in your mind.
Start investing in advance, and diversify your portfolio. While you may want to invest in growth-oriented investments like mutual funds, stocks, equities, etc., it is advisable to also park some of your savings in fixed-income, safe instruments like fixed deposit that offer stable returns with safety over your chosen tenor.
It is also advisable to save for emergencies, as such unforeseen situations warrant immediate action. You can consider options like Bajaj Finance FD to save for emergencies, and also take a loan against fixed deposit in case of emergencies, if you don’t want to withdraw prematurely.
In your 20s, following these 5 habits can ensure you enjoy a comfortable future, without having to depend on anyone to help fund your goals.