“I made my first investment at age eleven. I was wasting my life until then” – Warren Buffet
20’s, for most, is an incredibly dynamic one. You’re at a stage where you are defining your identity – concentrating on your career, pursuing your passion, building a business or looking to support your family. This age is often considered too young and too early to think about the financial future.
Focus is more on immediate issues such as paying monthly bills, education loan EMIs and spending habits that you can’t contain. You might think that you have a few years before you think of long-term investments but an early start can get you ahead in the race and buy you a few days that you don’t have to work.
Below is a simple path to get you started with your financial planning:
1. Tune out all the distractions and tune into listing down some clear dreams and life goals. This will give you a compelling reason to start saving.
2. Prioritize your goals. Segregate them into ‘must-haves’ and ‘good-to- haves’ based on your current financial situation. Visualize them, pin a target amount and set a deadline for achieving it.
3. Create a conscious spending plan. It may seem restrictive but is quite empowering, as it will channelize your spending towards the things you really want and curtail the unnecessary ones.
4. Build an emergency fund. Ensure you have sufficient money available should an emergency arise. This fund should be replenished in case you use and deplete it. You can start to slowly build it by channeling a portion of your income to it. This will also allow you to focus on other goals.
5. Develop a financial plan & start investing. Calculate the money you can keep aside regularly towards your goals without drastically hampering your lifestyle. Re-adjust your goal requirements based on your current circumstances and start investing.
What do you think are your life goals that you should be prioritizing now?
We at MoneyUp can help you create a financial plan and assist you through your journey of realizing your dreams. Getting started isn’t easy but with proper tools and a plan, you can easily get there.