Your 20s really are a magical time in your life. You’re right in the middle of figuring out who you are, what you want out of life, and not to mention, making awesome memories! But when you’re in your 20s, you’re also bad at handling money. It just seems to disappear from your account as soon as it gets there! This is why you need some tips on how to save money so that you can set yourself up for a bright future.
If you think you’re too young to be worried about money and savings in your 20s, think again. Your 20s are a time when you’re the most financially vulnerable in your professional life. This is why having savings becomes even more important. But don’t freak out. We’ve got your back. Because this is so important, we’ve compiled a list of very helpful tips on how to save money. Take a look now and your future self will thank you later!
Tips on how to save money: How much should I actually be saving?
Experts say that as in your 20s, your savings should be around 25% of your monthly income, before taxes and other deductions. Now I know 25% seems like a lot of money to save, but it includes any retirement plans you may have (we’ll talk about this in detail later). So, saving 25% every month actually isn’t all that bad once you break down the costs. And of course, if you follow our tips on how to save money, it will be a whole lot easier.
Here is a really helpful guide to help you figure out how to break down your costs on a monthly basis!
See Also: How To Use Quarantine As A Money-Saving Opportunity
“What are my goals?”
I know you spend approximately 90% of your 20s asking yourself this very question (The other 10 percent is spent asking what you want to eat for dinner). But your savings largely depend on what you want out of life. Maybe you want to travel the world one day or have a destination wedding. If you want to buy a three BHK by the time you’re 30, you better start saving a lot more money. These tips on how to save money will only help you if you know what goals you’re working towards. So, before anything else, find out what you want your future to look like.
Become a habitual saver!
I know saving money is really hard for a lot of people. I mean, there are distractions everywhere. I mean, even Instagram has a shopping option now, for god’s sake! But for the sake of your future self, you need to get your spending under control. Your Savings build up over time, but they can also deplete over time if you don’t keep a check on it. These would not be good tips on how to save money if we didn’t show you a couple of tricks to cut down your spendings. You can start with shopping at more affordable grocery stores and buying canned goods whenever you can. Try shopping at thrift stores where you get a wide variety of clothes at a fraction of their original cost.
Here’s a more comprehensive list of things you can do to spend less money!
Related: The Best Money Saving Apps to Reach Your Finance Goals
In the case of an emergency!
This is one of the most important points in this list of tips on how to save money. Having some money for emergencies is really important. You cannot predict the future, but you can certainly prepare for it. Not having an emergency fund can have terrible consequences. In the case of an emergency, you might find all your savings gone. So, set aside some money each month in your emergency fund. It doesn’t have to be a lot, just 1% or 2%. If you do just this for even eight months, you’ll have a good size fund for your 20s.
Roomi tip- Make sure this fund is completely liquid. That means you should be able to access it whenever you want. Your savings account is a good place to keep it.
Get your retirement fund started!
Yes, I know, you hardly ever want to think about your retirement in your 20s. After all, it’s at least a few decades away. But if you want to have enough money to survive when you’re old, you need to get your savings in order now. There’s a lot of great retirement plans that you can look into, including employer-sponsored ones. Here is a really helpful list that can help you decide which one suits you best. and also, don’t be like Homer Simpson!
Well, that concludes our list of tips on how to save money in your 20s. Now that you know what to do, start saving!
Check out: 5 Tips On How To Save Money While Living In NYC
