How to manage money? How to manage money in your 20s? Many people talk about it but the sad thing is that they don’t even get this solution for years that’s why people struggle to manage their money.
No matter whether you earn 10000 rupees per month or 10 lakh rupees per month you can’t manage your money you are going to be bankrupt one day I am sure or you will live your life paycheck to paycheck.
Well, you will get the proper solution in this article I know you will say this article is about how to manage money in your 20s but I am in my 30s or 40s on and on.
But listen to my friend no matter what your age is the thing is that you had passed your 20s then also you need to read the article very seriously the reason why I am telling you is that you have to see which mistake you had made in your 20s so that you won’t repeat in the future and if you had not to touched your 20s and you are going through this article that means you have bright future.
Let’s start without delaying further.
Contents
- 1 How to manage money in your 20s
- 1.1 1. Track your expenses
- 1.2 2. Budgeting
- 1.3 3. Save money
- 1.4 4. Invest money in yourself
- 1.5 5. Emergency fund
- 1.6 6. Get insurance
- 1.7 7. Invest money
- 1.8 8. Know your money goal
- 1.9 9. Retirement plan
- 1.10 10. One income source is not enough
- 1.11 11. Side hustle
- 1.12 12. You can’t get into bad credit
- 1.13 13. Avoid debt
- 2 Best financial descision in your 20s
- 3 How to manage personal expenses?
- 4 FAQ’s
- 5 Conclusion
How to manage money in your 20s
Well, one minute I am trying to tell you the points in steps which are not mandatory to follow as it is but if you can follow this step by step things then it will be much better for you.
- Track your expenses
- Budgeting
- Save money
- Invest money in yourself
- Emergency fund
- Get insurance
- Invest money
- Know your money goal
- Retirement plan
- One income source is not enough
- Side hustle
- You can’t get into bad credit
- Avoid debt
1. Track your expenses
Track your expenses. If you can’t track it you can’t manage it. This is my favorite line that I had heard. Seriously man if you want to make a budget, save money, invest money, or whatever you have to do. The first thing that you should know is what expense actually you are doing.
Are you going in the right way or you are just spending money on stupid things that you don’t even need just by seeing others? No man are you gone mad? If you will do like this you are going to make 100 crores zero within a few days seriously speaking.
2. Budgeting
Have a budget without having a budget you will spend your money on anything. The beauty of budgeting is that you won’t spend extra money on any unwanted things. By doing budgeting you can save tons and tons of money. If you don’t know how to create a budget then this article will help how to create a budget and stick to it.
3. Save money
Save money, dear. I know you had heard this from many people but the question is have you saved money or how much money you have saved yet? No answer right? Because you don’t know how to save money read this article on how to save money fast.
4. Invest money in yourself
People always talk about investing in the stock market and investing in bonds, the thing is that they forget to invest in themselves. Investing in yourself can give you infinite returns. This is not what I am telling, this is what Warren Buffett says one of the finest players in the stock market says self-investing you can do to get infinite returns.
5. Emergency fund
Emergency fund, what I want to say now is I don’t care what you know I simply care do you implement things in your life the reason why I am telling is that every people know about emergency fund but they still don’t have an emergency fund that’s why I don’t bother you what things you know the thing is that are you implementing those things in your life or not if you don’t implement in your life that thing will not make you great. Read this emergency fund step-by-step guide.
6. Get insurance
Insurance I don’t know why people do like this first they will tell that they don’t want money and the second thing is that when it comes to their health while purchasing insurance they will save money. Are you crazy man? If you live then only you can save money earn money or whatever you want to do with the money if you will not live then how you will save money or what will you do with the money you can’t take money with yourself. Understand it think about your parents and family.
7. Invest money
Listen if you think that saving can make you rich then I suppose you might be wrong and if you think that investing in FD can make you a millionaire then you are totally wrong. There are lots of good options if you compare it with FD you can invest in bonds, the stock market, mutual funds, real estate, gold etc. I don’t think why people are always ready to invest money in fd in spite of it hardly gives a return.
Tell me what is the average return you get in FD around 4-5% normally but wait this is not the whole picture after deducting the tax how much do you get around 2% to 3%? So tell me one thing what is the inflation in our country around 6-7% so tell me did you beat inflation by Fd.
8. Know your money goal
You need to know your money goes to achieve it if you don’t know where you want to go you will just get confused and you will not get to your destination. So whether your goal is to make 10 crores, 1 crore, or whatever we need to have that in our mind. So that you will work according to that if you don’t have any goals you will be satisfied with what you are getting okay.
So if you earn 10000 rupees per month today and your goal is to achieve 10 crore so you will work according to that you will work hard you will don’t waste your time because you know you have to achieve that target so you will do more things etc which will you to scale up your skills.
9. Retirement plan
No matter what your age is but you have to know your retirement plan for that you have made your retirement plan. If you don’t know how to retire at early age you can read this article.
10. One income source is not enough
Well, you know very well that your one income source is not enough for you because you are living the day you get your salary within a few days your salary is wipeout and after that, you are like stretching yourself to that next salary date so that you can get the salary again when you can do expense. This is not a good habit well to overcome this you have to manage habits or you need to get another income source that will help you.
11. Side hustle
Listen you are working nine to five jobs ok it’s good to know that but that income source is not enough for you so in order to increase your income source you need to work a little bit hard I know it will be challenging but you don’t have any other options. So for that, once you get back home after your office or whatever you do you have to do some side hustle. No matter if you get 1 or 2 hours.
But that one hour every day can create a huge income opportunity for you but the question is are you willing to do it or not are you passionate about doing that thing to achieve your goals or not otherwise you will spend the rest of your time like others enjoying, wasting time, watching Netflix, any other things after coming back to the home. It’s your choice listen no one is coming out to help you have to stand up for yourself on your own.
12. You can’t get into bad credit
I know look credit cards can be useful for you but most of the time many people get into the trap of credit cards and they are working day and night working to pay off that huge credit card interest. If you don’t know let me tell you that credit card interest can go up to 43% and 45% annual interest. Yeah, it’s true you can go and check out also but the thing is that you have to manage it well I think personally you don’t know how to use a credit card so learn this by reading articles or avoiding using credit cards it’s up to you.
13. Avoid debt
Avoid debt I know that taking debt is not a bad thing but the thing is that from what perspective are you taking debt for jewelry or fulfilling your wants by putting debt amount anywhere which you don’t know that’s why if you are doing this stuff by taking debt.
Then I highly recommended stopping doing that now because one day you are going in a bad condition that you won’t realize that so take debt for a good reason, not which might be the reason for bankruptcy in your future so think thousands of times so taking any debt from anyone or Bank okay.
Best financial descision in your 20s
Some of the best financial advice for 20 year old are as follows:-
- Don’t follow the crowd.
- Read blogs on personal finance like mine or any other you want, watch youtube videos on personal finance, listen to the podcast and you can go through some great books on personal finance.
- Don’t only focus on saving focus on investing.
- Try to take a calculated risk read it again I said calculated.
- Don’t fall into the trap of a quick rich scheme.
- Also, don’t look to double money in a couple of weeks that is what basically called gambling in other words if you don’t know.
- Don’t tell a lie about the degree focus on the skills. You are not the only one who is getting a degree there are many students like you.
- It will be not easy to follow different paths but you have to understand this if you follow what every others are doing you will get what they will get simple.
- Focus on multiple sources of income.
- Have at least one passive income source that I personally recommend to you if something goes wrong you can have the benefit of passive income.
- Focus on money management. Manage money so that you won’t get into the trap. Read this article money management guide.
How to manage personal expenses?
Well, it’s very easy to manage your personal expenses thing all you have to do is to track your manage expense whether you have a little bit of expense or high-income expense no matter you have to track your expense because if you can’t track you can’t manage it too.
FAQ’s
What is the 50 30 20 Rule?
50 30 20 rule is very useful for making a budget. Simply it says divide income into three parts 50% 30% and 20%. 50% will go in your needs 30% will go in your wants and 20% will go in your saving and investment. But do you know what 50 30 20 can make you poor don’t believe me read this article.
How much money should a 25 year old have?
No one can give the perfect answer to this question because the reason is very simple. Every person has his own desires, needs, expense amount and all the things so also it also depends on the location where he or she lives. So it will be wrong if I tell you that you need so and so money at the age of 25 the only thing that I can tell you is that have a couple of money in your emergency fund and do invest yeah this will be good for you. If I tell you, you need 1 lakh rupees at the age of 25 then it’s totally wrong.
How can I grow financially in 20s
To grow yourself in the financial field you have to read finance blogs, and books, watch videos on YouTube regarding finance, and listen to podcasts on finance. See man the reason why I am telling you to do this is in our school, college, or university we don’t get this practical knowledge that’s why many people who graduated from very high Universities still fail in money because they are not aware of all this stuff. So you need to upgrade this finance from an external source like what I talked about above.
Is 27 too late to start investing?
It’s never too late to start investing but the thing is that you will see the difference between starting early and late starting. But don’t get disappointed instead of not doing anything you are going to start this is a very good idea and trust me don’t delay from now onwards.
Is 1.5 crores enough to retire?
Again if you live where livelihood cost is less then it might be useful might can or if you live where livelihood expenses are much more then it won’t be beneficial for you.
Conclusion
I hope your search got ended after reading this article on how to manage money in your 20s or if someone is looking for the best financial advice for 20 year old. I tried to give my best so that you get a clear idea about how to manage money wisely.
Share this article with your close ones who are suffering from money because sharing is caring.