Are you in your 20’s of just passed that 20’s age bar? If yes then you can relate to this the most. How many times in your 20’s you have decided to save and failed miserably? I know many times. Because that happens with me as well. We make some ‘Money Mistakes in the early stage of our career’. Sometimes we know how much it will cost us in the future and sometimes we do these mistakes unknowingly. Whatever may be the reason. We can avoid such mistakes, save as much as we can, and live a fulfilling life, Even if we are in our ’20s.
Here are these 5 Money Mistakes that we can avoid to save more.
1. Careless Spendings: Most of the time When we go shopping, we like something, we don’t think much about whether it is needed or not, whether this expense is necessary or not, and so on. When we do not have much financial responsibility we end up buying things that we love but of no use. For example. I saw this amazing pink Intex instant camera, I had money and I bought it. Later on, I realized I do not use it much. So it was my careless spendings, right? Similarly, I am sure there must be many. Many times we do this unknowingly. But we can stop this. By 24 hours rules. So Whenever you are going for shopping or doing online shopping and you stop by something that you like, Decide that you will buy this tomorrow. And in these 24 hours, ask yourself a couple of questions
- Do you really need this?
- How many times you will use this in a month?
- Do you have a space to keep it?
- In a week’s time span, how much do you need it?
If the answer comes satisfactory then buy it the next day, or just skip it if you do not get these answers. Most of the time this technique works.
2. Not tracking our expenses: Most of the times when you are single (As in unmarried), you do not have many financial responsibilities, Newbie in the job, You live alone or in a PG, you spend most of your money in things like outside food, Mall, shopping, etc. Well even if the amount is not much, you do not get to know how much did you spent if you do not track your spendings properly. So Make sure that you track your spendings, Write down your everyday expenses in a notebook, or register your spendings or expenses in apps like spendee or Seedly or Pocket Expense. They are really useful.
3. Not setting Financial Goals: We must agree on one point that if we have some goals they motivate us to do something bigger, Something better. They inspire us to achieve more. So Setting financial goals can help us in saving more. What we do not understand in the initial days of our career that setting these goals earlier can help us in achieving them earlier. So it is very important to set some financial goals like I will save 50K in one year, Or I will save the money for the downpayment of my house in the next 3 years or so. It may seem so big and unachievable in the beginning but with time they will inspire you to work hard, work smart, make more money and save more eventually.
4. Not having an emergency fund: Emergencies won’t tell and come. COVID_19 and Lockdown is the best example of it. So life is uncertain and we must be prepared for it. Sadly we do not understand this in the initial days of our career and so we do not act towards it. Having an emergency fund is A MUST in today’s scenario. If we do not work towards it nothing is going to happen. So to have an emergency fund we must divide our salary into 4 parts.
- Compulsory expenses (Rent, Bills, Etc.)
- Monthly Compulsory savings. (Mutual Fund, RD anything)
- Miscellaneous expenses (Other expenses that you want to do including shopping and weekend plans)
- Emergency Fund (This is Compulsory)
In this way, we will be able to manage our salary and we will be able to save for the uncertain times apart from our regular savings.
5. Not having health insurance: This is another Must Must Must thing. (Can not emphasis on it more how it is important for all of us). Again COVID_19 is the best example of it. Nowadays when we say hospitalization we immediately think about how much money it will cost and can we afford it? To reduce this pressure if we have health insurance (Apart from what your company gives you) we are quite sorted from the very earlier stage of our career. And we can increase our insurance limit with time. So Not having health insurance is the biggest mistake we do in our initial career days. Not necessarily you will have 30-40 lakh rs. Insurance. You can start with basic, but if you have it you are tension free.
So these were the 5 basic Money Mistakes that we do in our initial career days. If we avoid them no one can stop us from being Financially independent in a very early stage of our lives, and becoming our own finance hero.
- Niharika Pole Sarwate