Finance Tips everyone in their 20’s should know

Money is considered to be one of the most important things and hence having habits to expand the wealth becomes more important to learn. Your 20’s are the most life changing years as you are almost new to finances and have so much time to understand and learn about how finances work.

The sooner you learn to make a financial plan the brighter can your future be. "Building habits, especially in your twenties, is so important for long-term success," says John Deyeso, a financial planner from New York City.

Some of the Important tips that everyone in their 20’s should know are-

1) Keep a track on your Credit Score

As you are in your 20’s you might not have a credit score as such but the same can be increased if you take care of some crucial things like Paying your EMI’s on time. Paying your EMI’s on time will keep you away from unnecessary late payment fees and you would save money. Avoid Credit Card Debt- One should always try to avoid Credit card debt as rising debts will create a lot of pressure on you in the years to come.

2) Learn more about Investing

People in their 20’s should start inculcating a habit of saving at least 20% of their income as savings. These can be allocated as investments in Equity, Mutual Funds, Fixed Deposits, etc. Investing should be done only after one starts educating themselves about the various investment options as according to Sir Benjamin Franklin- “An Investment in Knowledge pays the best returns”. Investing without having any kind of knowledge about the same can prove to be harmful to your pockets.

3) Creation of an Emergency fund

The situations that everyone faces are unforeseen. One never knows what kind of good or bad situations one might face. Hence, you should create an emergency fund to be on a safer side. This fund can help you during financial emergencies, medical emergencies, natural emergencies, etc. It is suggested that you should have an emergency fund of at least 3-6 times of your monthly income.

4) Keep a check on your expenses

Who doesn’t like spending money for having fun or for entertainment purposes in their 20’s? Even though you like spending there should be a percentage of income that you would want to allocate for your entertainment. In simple words, you should make a budget for yourself and be very certain on how much you would like to spend for the month and how much you would want to save. For now, maybe all you spend on is food and entertainment, but in future you would want to buy a mobile phone, car, house, etc and you cannot buy any of these without keeping aside money for the same. In short, you can buy them only if you save a small amount every month.

5) Financial Planning.

You might feel that you are too young for planning your finances but if you wish to have an 8-digit bank balance, financial planning is a must. “Wealth is not about having a lot of money, it’s about having a lot of options”, says Chris Rock. Under planning you would have to Set Financial Goals, start contributing for your Retirement and if possible, also work with a Financial Planner who would guide you through it all.


Financial Independence doesn’t come with luck or by magic. It takes conscious effort from your end to be better at finances at every point in your life. A financially happy life can be taken care of by being Financially Literate.