How to save money in 20’s?

September 6, 2015   ·   0 Comments

How to save money in 20’s?

This article is for the people in job still figuring out how and where to start saving money. Let us face it. Most of us don’t understand the nuisances or details on how, where we should save money.  The maximum most of us do understand is that we can save Rs. 1.5 Lac in tax saving which can help us save Income tax. Let us try to bridge the knowledge gaps in this article.

Read:  Tax Saving Techniques

How situation is for young Girls?

Girls leave the saving part mostly to their Dad, boyfriend or husband. All they understand is that they should have money when they want to do shopping. The thought of not having money when they need it, hold most of the girls to start saving or financial planning.

It won’t be wrong to portray that world economy is run by girls. If we would not have girls, 80% of the brands would not existed in the world.

Saving is seen as an obstruction which would come between her desire to shop and her as Parents are considered as obstruction between her and her love.

How situation is for young Boys?

Most of the boys once in Job, either start converting their old fancied cherished toys be it PS4, Bike or Car into reality or happily spend the money on Alcohol, Bars and girls. “I will worry about it later, I am young and I will have fun for now” is the general mantra for young boys

It won’t be wrong to portray that young generation when gets the power of money in their hand do very little to understand that how they should handle money. Recent survey shows that young generation in India would continue to work even after Retirement as they would not have enough savings to retire.

Read: Power of Regular Savings

How much saving you actually need to start?

If you are still with me till here in this article, then please congratulate yourself as it already signifies that you have taken the first step towards financial freedom and is being serious in getting your savings and expenditures in balance. It is really not hard as it sounds as even starting from as little as 1,000 Rs would help you immensely.

There are 2 vital rules in Financial Planning:

  • Start Early
  • Mapping savings with financial Goals

Start Early: Start saving monthly for your first job. Believe it or not, if you’re lucky, one day you’ll find you are older, so it’s best to be prepared. Setting up automatic contributions to your retirement vehicles at a young age will help you build wealth painlessly.

Let us take an example. Let us save you start saving Rs. 1,000 per month at age of 25 years which gives you 10% return year on year. At age of 55, you would end up having 22 Lacs as compared to person who start saving at age of 35 who would end up having Rs. 7.65 Lacs only.

This below mentioned table shows the amount which would get generated at different rate of return for different years:

Returns Percentage/Years 3 Years 5 Years 10 Years 20 Years 30 Years
10 % 42,130 78,082 2,06,552 7,65,696 22,79,395
15 % 45,679 89,681 2,78,657 15,15,954 70,09,820
20 % 49,600 1,03,454 3,82,363 31,61,479 2,33,60,800


Mapping savings with financial goals: As there can’t be a single medicine to different diseases, then how can one save everything in fixed deposits to achieve their financial goals. Most of the people are comfortable to do their savings in Fixed Deposits and Recurring Deposits.

The best way to do savings is to map your saving with your financial goals, pick the investment which would help obtain that financial goals. Equities and Mutual funds provides best return for Long terms goals such as Retirement planning and children education whereas fixed deposits, RD’s can be used to achieve short terms goals such as buying a car etc.

Young investor needs to ensure that they maintains their portfolio in 80:20 ratio for equities:debt which would overall help them create wealth and do saving in the optimal way.

Read: How to do Savings?

Do let us know in comments section if you like the article and if there is any open ended queries you have for me.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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