The way you handle finances in your youth is likely to remain the same throughout your 20’s – unless you do something about it. If you are impulsive around money when you’re young, you will likely struggle with financial issues in your 30’s. Financial planning and lessons learned late in life can be costly. If you learn how to protect your savings in your 30’s (which includes getting a retirement fund FYI), you’ll make the rest of your life a hundred times easier.

But it’s never too late to consider making sound financial decisions that you may have missed along the way. It’s essential to learn the basics of finances, whether you earn money or not. Budgeting, financial planning, and savings are useful learnings for all ages.

1. Financial Planning 101: Start saving

You can then make your finances work for you. Find out your monthly expenditure and stick to your budget for at least three months. This way, you can build a habit and push yourself to hold on to that attitude for the year. As you consistently depend on your budget to handle your finances, you get to manage money much better. It will then help you gain clarity on your non-essential expenditure.

2. Start your financial planning early

When you’re young, it’s easy to push financial planning and financial goals to the later stages of your life (and to the back of your mind). People think that saving starts once you are secure and have a job or have many responsibilities. Nothing can be far from that as financial planning and goals begin early in your life.

Put that little money you have in your possession to good use. Know what you want to have, and take this time to practice essential money management habits. All habits reared at this stage of life, i.e., savings, budgeting, and living well within your means, go a long way toward shaping your life and attitude.

3. Beware of debt when financial planning

You will require debt at some stage in life but try to have ‘good debt.’ Avoid lifestyle debts to match your friends or colleagues. Go for a small, simple car as your first car rather than a flashy one. Just because your friend wears the latest branded clothes does not mean that you should do the same. Do not let your life get derailed by other people’s lifestyles. This way, you will have room to pay for a deposit towards your house.

4. Protect your savings

Protect your savings and link them to your long-term goals. If you have saved for emergencies, don’t touch that money unless you are in a crisis. If you’re serious about financial planning, it’s really important to have an emergency fund. It’s best to maintain a six-month emergency fund. with three months’ worth in a liquid fund. It is time to be mature and remain disciplined to your savings goals – and not deviate from them just because you feel like splashing out on a new flashy watch.

5. Be aware of your credit

Be cautious of your credit card spending, and do not cross one-third of your credit limit. Keep no more than three credit cards, and make sure that you pay off the bill at the end of the month. This way, you avoid unnecessary interest on a part paid credit.

6. Manage your income

You might have made all the right financial plans and decisions, but you need to review them regularly. A review helps your finances align with external factors like interest rate cuts that might affect your savings. A map of your financial situation is periodically required when you move to a steady income stage and thereby reallocate the spread.

7. Too early for retirement fund?

Your financial planning will not be complete without a retirement fund. It’s like going to the gym regularly – some can, many can’t. When you begin to build this habit early in your life, you get stuck to it as a ‘normal,’ just like savings. Retirement fund works the best when you are regular with it and under 30. We strongly recommend contributing towards your retirement fund. For more info on the different types of retirement funds, check this out!

It pays to make the right financial decisions in life. Build that savings base, manage your debt, and have controlled spending patterns. A financially literate person will make better business decisions and will use the finances productively to serve their best needs.

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