It is often said that money cannot buy you happiness. Yet, one cannot deny that you need money anyways. This is why many people work hard in their 20s so that they can be financially free! Being financially independent means having enough money to pay your expenses for the lifetime without being dependent on others or being employed. Now you might wonder how one can one achieve that in their 20s, when they are just starting their careers? This article gives the 10 best tips!
Small habits, big results
First and foremost, realise that it will take time to achieve financial independence. It is not a one day job. So, start with building habits that contribute to saving more money. The better you follow those habits, the faster you would reach your financial goals. Another thing to note here is that you need to learn to be kinder to yourself. Do not ever beat yourself up if your expenses rise all of a sudden. Instead, try altering your strategy.
10 Tips to establish financial independence in your 20s
1. Create budgets
If you want to save money, you must decide how much money you need to spend. A budget is simply a plan of how you are going to manage your expenses. To create a realistic budget, first check all your spendings like groceries, house rent, books, stationery, internet bill, electricity bill and so on. Now, see where you can cut the costs and save some money. Allocate a fixed amount for everything so that you know how much money you have to spend on your monthly needs.
2. Stay lowkey
If you want to save more money, you need to build a lifestyle that allows that. It cannot be done if you are running behind branded clothes and footwear. You need to learn to live a frugal life. Start spending your money wisely. Watch out for your shopping habits. Use public transport more often. You might also start practising minimalism to save money.
3. Watch your shopping trends
Are you an impulsive shopper? Many times we go out shopping and we end up buying things that we do not need. Sometimes, we shop when we are bored. While many people go out shopping when they are stressed or depressed. If you have any such tendencies, get ready to change that. One of the best ways is to create a shopping list and stick to it no matter what.
4. Learn to cook
According to a survey, Americans eat out 5.9 times a week! There is no harm in eating outside but it might be draining all your savings. It has been found that cooking meals at home cost much less than eating outside. So if you want to become financially independent in your 20s, learn how to cook and enjoy economical meals at home.
5. Check yourself
Making budgets and setting financial goals is great. But, if you want to stay consistent, you need to keep a check on yourself. Create an expense log where you can track all your expenses for the month. Then, check your account statement every month and balance your transactions. See whether you are meeting your goals and if not then how can you save more the next month.
6. Set goals
You must have a strong reason behind saving money. So start setting financial goals for yourself. For instance, you might want to create an emergency fund for your family or pay a debt. You might want to buy a house by your 30s or simply establish a habit of saving money. Set clear goals for yourself that would motivate and inspire you to save more.
7. Look for deals
Want to save more money? Just wait for the right time. Look for online sales, offers and deals while buying groceries, clothes, books or stationery items. You will save a lot. Most online grocery stores have weekly offers or monthly sales where you can buy products at a much lower price. But make sure not to get lured by their attractive marketing tactics and shop impulsively!
8. Create an emergency fund
Save some part of your monthly salary in an emergency fund. Creating an emergency fund might help you at the time of crisis. For instance, if your car breaks down, if you need to enrol in a new course or, if you or someone in your family gets sick, you can use this emergency fund at that time.
9. Do not take yourself for granted
Saving money should be your priority. After all, it is for your better future. It should not be done after every other expense is taken care of. Learn to pay yourself first. Jack, who offers assignment help in Accounting and Finance says, “make it a habit to save some money first and then spend the rest on your monthly expenses. You may apply an auto-debit on your account that would send some part of your salary into a savings account.”
10. Be patient
Do not rush. Take a deep breath if you are finding all this savings process overwhelming and start over. There would be days when you will shop extra. Sometimes some unexpected expenses might come up. Do not blame yourself. Thomas, who offers homework help in Economics says, “your goal should be to watch yourself from spending unnecessarily. Do not let your mental well-being suffer because you have to save more money.”
Saving money is a skill that takes time to develop. These 10 tips will help you inculcate a habit of saving more and spending less. You might not follow all of these ten tips together but gradually move towards your financial independence. Focus on adopting one habit every month so that you can get accustomed to creating budgets, logging expenses, and creating a strict shopping pattern. After all, do not forget to track your progress and alter your money-saving strategy accordingly.