In this article, we will be discussing what are the mistakes related to money which one should avoid during their 20s and what should be the learnings one should take from their early-earning period mistakes. Let’s discuss this in detail in this article as we move ahead.
1) Focus on Earning More:
- During the early times of an individual, he/she needs to highly focus on increasing their earnings.
- One needs to upgrade his/her skill set to increase the earnings.
2) Repay the High-Interest Debt:
- If an individual has taken a debt that possesses a high-interest rate, then an individual should try to repay this debt as soon as possible.
3) Avoid Buying a New Car:
- During the 20s especially during the early earning period, buying a new car that too in the loan can prove one of the big financial mistakes of an individual as it can cause financial distress.
4) Budget your Monthly Expenses:
- During the 20s or early earning period, generally the expenditure of an individual increase on several needs and wants.
- Here, a basic thumb-rule one should follow is that firstly he/she need to budget their monthly expenses, as well as should keep aside at least 30% of their monthly income for long-term investing purpose.
5) Learn & Read about Investing:
- An individual should read and learn about investing and personal finance during their 20s.
6) Start Investing:
- The first thing one needs to kick off during their 20s is to start investing. The Investing process can be started with Mutual Funds, Equity, or any other desirable investment avenues (but with the proper assessment).
- One need to delay the thought of commencing investing and should invest as soon as income has arrived in the hand of the individual.
7) Don’t Follow the Herd:
- An individual should follow the herd and should take decisions wisely and with proper concise of that particular thing. This rule is especially applicable in Investing.
8) Remember the Short-Term Goals:
- While commencing the investing journey during the 20s, one needs to also look upon their short-term goals. As if money is invested in the equity and there is a short-term goal of an individual, then there could be a chance of some issue in the market at the time of need of money invested in the market.
9) It is absolutely fine to make mistakes:
- For individuals who are in their 20s, it’s okay to make mistakes until the person is learning seriously from those mistakes.
- One should not make mistakes intentionally. Also, one can learn from the mistakes of other people.
10) Never Compare with Others:
- An early earner should not at all compare himself/herself with others professionally as well as on the other front.
What Should an Individual Do?
All the above-discussed mistakes are some lessons for the early-earners, students, or individuals which one should take care of during their early earning periods. Also, do follow due diligence before making any investment decisions.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.