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Financial Hacks for 20 Something

5 Financial Hack To Follow For Every 20 Something

I wish I had read more about making myself financially independent when I was in my early 20s. Financial hacks are not a waste of time. If you start planning your finances early in your 20s you will end up being one lucky chuck in your late 20s. One obvious thing is, being a 20 something, almost out of college (mind/heart still there)- the last thing you are thinking about is making yourself financially independent. Further studies, which job to apply for, how to lend the dream job, girlfriend/boyfriend etc are the topics keeping us busy. Plus, you don’t have a ton of money to invest. Good news is, you don’t need a ton of money to invest.

The biggest spending we do in our 20s is on, mobile phones, movies, eating out with buddies on weekend, smoking-drinking-pubs-bars etc. When I asked a youngster not to smoke he told me, “I’m developing a taste for life.” Uhuh? Really? Developing a taste for the cigarettes is only going to increase costs when you start earning. Don’t believe me? Read this article in Economics Times Wealth about the hidden cost of smoking: LINK

Financial Hacks I wish I knew earlier.

1. Know the hidden cost of products: What is cost? when you spend some amount of your money to obtain something, it’s the visual cost of the product. Then there are other costs like servicing, maintenance etc. The benefits are mainly to the companies. For example; Buy a mobile: Rs. 20,000 + headphones: 500-1000 + screen-guard 500-2000+ games-apps (?? depends on use) = Rs. 23000/- Average spender. This is for something you will hardly use for about six months to a year. Soon, you look for replacement.

Financial Hack. Mobile costs

Let’s be honest. Technology is evolving everyday and every three months there’s a new model or an improved model of the same products you bought a month ago. What do we do about it? We make a sad face and look for ways to lend ourselves the newly developed products.

2. Get a part-time job. It’s an education too. Yes in India it’s not so cool but look for it and if you land one then do it. You will be able to learn how money is earned and how easily it’s spent. It will be a great help to your parents.

3. Look for Scholarship. When you are in your 20s it’s easy to ignore the importance of a scholarship. It helps you bring down the cost of your education. Don’t start thinking now that it’s what my parent’s are there for. Yes, in India parent’s still bear the costs of education and all other expenses of a kid/adult until they get a job. Sometimes it takes longer then you might think and trust me, your parent’s are people too no matter how much you deny that & they will appreciate it if you could help them in some way. Find ways to bring down the costs.

In many countries children start working at an early age. Throwing newspapers, baby sitting, reception, shop attendant, waiting tables etc are some of the preferable jobs. They do get support from parents in college and in countries like USA, Canada & many European countries the schooling expenses are paid for by the government till the kid is 18. In India it’s opposite, parent’s bear all the costs till the child get’s a job. it comes as a surprise when people hear about Indian kids depending on their parents till they are in a proper job.

Save for the road trip. Financial Hacks

Yes Save for it. Don’t let your Papa pay for it.

4. Invest. You don’t need to be a hardcore, well read investor to make a few changes in your spending habits and develop an investment habit instead. Invest in simple funds where returns are sure. For example, Bank Fix Deposits, Post Office Fix Deposits, Recurring Accounts, NSC etc. Look into Mutual Funds only when you have a good guidance or you are well versed with the Stock Markets. I still remember I read about a guy who was almost 28, studying under graduate degree and was investing in Mutual Funds to support his education when he goes for MBA. All from the pocket-money his father gave him, Rs. 25000/-. I mean it’s good that your parents support you entirely but isn’t it time you learn to support yourself just a little?

In my opinion the two best investment for students are, the recurring term deposits & Public Provident Funds (PPF). I know, in PPF your money is locked in for 15 years and Recurring Deposits don’t pay much interest. In fact both pay about 7-9% interest. It’s not enough, but it’s not less. I will talk more about it in my next post.

5. Don’t lend money just like that. – In your early 20s you will learn many times over that not everyone is your real friend. Many people will ask you for money in college and at work. Don’t lend money without knowing the real cause. Know why they need it, make it clear that you will be needing the money so they HAVE to return it. My papa once told me, “when you lend money to your friend or even relatives you must be prepared to let the money go or the person.” Bitter but that’s the reality.

Forget the friend or forget the money. Sometimes both.

I did lend money (No use of brains what-so-ever) to a friend when I was a student, Rs.10000/-. Yes, it was a big amount in 2010, still is. I lost both, never saw the money again and my so-called friend even abused me verbally when I dared ask for it. When given by a friend or relative, money becomes less of a concern to return. It may take years and lot of headaches before you see the money again or not. If you do lend money, set a criteria and get it on paper if the amount is big.


Decide what is it that you want to do in your life to earn. Get a PAN Card & a Passport. These aren’t financial hack but this is something you should know, being a student and in your 20s, you have a lot of advantages in life. Save for the road trips, solo trips and anything you want, it’s not big but it’s something to fall back on. A tiny saving habit gets a long way.

Most importantly you have most of the worst used commodity, TIME. Use your time wisely, invest some of it in yourself.

The sad thing is rarely someone is serious about their finances in their 20s and it costs them more later. The costs that become harder to talk about once you get older. You only realize the struggle one faces when you finally earn. Your dreams, necessities, wants, family etc all add up and you will want to take care of all of them, that’s our nature and why wouldn’t we want so.

Money is never enough. Be money wise. Start investing little by little. EVERY DROP IN THE OCEAN COUNTS.

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21 Comments

  1. These are wise tips, Hemangini! And yes, I am guilty that the money I should be saving is mostly spent in… uhmmm.. eating! 😀 😀 😀 (facepalm).

    So these are wise and I will try to do them, one at a time! 😉

  2. Very useful. And very true about the money quote. What part time job did you get?

    • I worked as a B&B receptionist, as a line girl in the ready made food industry, waitress, freelance writer etc. Thanks for reading Alex. Which jobs you did as a part timer? 🙂

      • Library assistant, silver service and receptionist at a graphics studio. You still in touch from anyone you met through them?

        • Just two people. Not much talk though. Apparently too busy.

          What about you?

          • For a while but it’s difficult especially if you don’t live near them.

          • hmm…it’s difficult with distance.
            Far from the eyes.

            But it’s fine as long as one remembers.

            A very good morning to you Alex. Have a wonderful day.

  3. I didn’t know this about Indian parents financing their children’s education D: I’ve always had a part-time job to cover my expenses and indeed it taught me the value of money.

    Now, are you also doing a post on retirement/pension plans? Because I know as a near-30er that’s also a big deal and people never think about that before it’s too late D:

    • Yes there’s a huge difference between how finances are handled in Western and Eastern countries.
      I will do posts on the retirement plans and investments too. We all have many dreams, gotta think of them as well for investment. I completely agree near 30er people are more interested in investment then ones in their 20s. But I think beginning in your 20s makes you smarter investor in your 30s.

      Thanks for checking this post out Sam 🙂 Will make sure to study Denmark a bit before I make the retirement posts.

  4. This is such an informational post… Thank you so much for sharing 🙂

  5. A back-up plan would be to develop some inexpensive hobbies … the best things in life, they say, are free!

  6. hmm…sound advice!!!!!

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