Your early twenties are the most memorable years of your life and also are the most crucial ones. Especially when it comes to money. For most 20-somethings with a steady job and economic stability, managing their finances is one of the biggest hurdles that they have to overcome. With the bad habits of both procrastination and ignorance, quite often people don’t pay attention to their wealth management till they are in their 30’s.
Do Not Drain Your Cash:
For much of the younger generation, the fear of missing out is a very real thing. And this fear drives a lot of them to spend money that they do not have just to be able to keep up appearances. Racking up debts over the student-loan debts that they are already buried under. Putting off responsibilities like investing to the future or deeming saving as “boring”, they wait far too long. Being debt-free is a big part of being financially independent. Learn to live on a budget and once you have done it for 3-4 months you will come to the realization that your expenses can very simply be divided into three categories:a) Essential b) Discretionary and c) Entertainment. The goal should be to reduce the spending on entertainment and to exercise more discretion. You should also have a sum of money set aside for emergencies.
Do Not Be Intimidated:
The thought of investing in stocks makes a lot of young people quite nervous. They do not make an effort until they are much older and that leads to investment choices that are faulty, resulting in portfolios that are flawed and economic insecurity in the later years of life. You can opt for an SIP(Systematic Investment Plan) that will let you invest a fixed amount each month in a mutual fund, typically an equity mutual fund scheme. A target date mutual fund is also a good option. Much like the name suggests, you invest until a certain year in a combination of stocks and bonds. You need not be a whiz at finance to consider investments. Keep it simple and watch your money increase.
Be Patient:
When you are young you have the luxury of time and when it comes to wealth management, time is most definitely on your side. The interest that you will incur on the amount of money you have invested will be compounded over the years and you can then reap the benefits of it. As much as you want to use what expendable income you have on luxuries and amusement, in the long run it will only harm you and your bank balance.
You have worked hard for the money that you have earned. You need to be smart about how you manage it. Start young when you can afford to be aggressive with your investments. You need not be afraid of the future when you can craft it yourself.
Do Not Drain Your Cash:
For much of the younger generation, the fear of missing out is a very real thing. And this fear drives a lot of them to spend money that they do not have just to be able to keep up appearances. Racking up debts over the student-loan debts that they are already buried under. Putting off responsibilities like investing to the future or deeming saving as “boring”, they wait far too long. Being debt-free is a big part of being financially independent. Learn to live on a budget and once you have done it for 3-4 months you will come to the realization that your expenses can very simply be divided into three categories:a) Essential b) Discretionary and c) Entertainment. The goal should be to reduce the spending on entertainment and to exercise more discretion. You should also have a sum of money set aside for emergencies.
Do Not Be Intimidated:
The thought of investing in stocks makes a lot of young people quite nervous. They do not make an effort until they are much older and that leads to investment choices that are faulty, resulting in portfolios that are flawed and economic insecurity in the later years of life. You can opt for an SIP(Systematic Investment Plan) that will let you invest a fixed amount each month in a mutual fund, typically an equity mutual fund scheme. A target date mutual fund is also a good option. Much like the name suggests, you invest until a certain year in a combination of stocks and bonds. You need not be a whiz at finance to consider investments. Keep it simple and watch your money increase.
Be Patient:
When you are young you have the luxury of time and when it comes to wealth management, time is most definitely on your side. The interest that you will incur on the amount of money you have invested will be compounded over the years and you can then reap the benefits of it. As much as you want to use what expendable income you have on luxuries and amusement, in the long run it will only harm you and your bank balance.
You have worked hard for the money that you have earned. You need to be smart about how you manage it. Start young when you can afford to be aggressive with your investments. You need not be afraid of the future when you can craft it yourself.
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