From the very childhood, our parents have introduced the concept of saving money. We have been raised on admonishment,” Money doesn’t grow on trees.” Here are some of the best money habits on how to build your wealth before your 30s.
There is a lot of emphasis today on the value of money, and how to handle it. However, the millennial generation is poor when it comes to savings and budgeting.
6 Best Money Habits You Need To Start Doing Right Now
1. Budgeting
It is a basic monetary principle that has never outgrown time.
The development of managing personal finance and savings hinges on budgeting. You can do it by limiting impulse purchases.
We all fancy nice cars, bungalows, and luxurious living; however, deferring these items for the future can be an alternative.
Instead, you can reward yourself with dinner or a special bottle of wine.
Another way to keep your expenses in control is to stop comparing yourself with your peers.
When we are younger, we constantly set a benchmark according to our friends, ignoring their income and background.
Don’t let them influence you when it comes to money-saving.
Focus spending step by step- When you start earning high, you spend high, rather than indulging in the entire furniture of the room.
Focus on buying one piece of furniture that has become dilapidated.
2. Learn the Value of Contentment
Instill the value of contentment within you. As a millennial generation, our belief in the concept of instant financing, and instant food has grown a lot.
Hence, by nature, we have become greedy, and we wish to accumulate wealth, and that too very fast.
However, wealth creation is a step-by-step process that needs attention and time investment.
By instilling the value of contentment within you, you may defer the items that you may not require now.
3. Step Aside some Amount from your Paycheck
As soon as you receive a paycheck, you might be thinking of indulging in treats, or you might have to pay for the utility bills, credit card bills, groceries, etc.
However, you need to prioritize savings and the best thing to do is set aside some money for yourself.
You can do it by automatically transferring the amount into direct deposits.
You can create multiple accounts so that some of them can go towards future savings.
Also, you can create instant alerts where your money is moved to a recurring deposit as soon as it comes to your savings account.
It is how the concept of paying yourself works. Paying yourself allows you to build wealth and teaches you the financial discipline to be better placed in times of emergency.
It will also help you to brace up for retirement with grace.
4. Be Debt Free
Being debt-free is one of the best money habits. Before 30, one can still make financial decisions without any wary. You can plunge into risks by taking debts.
However, it is important to repay it rather than piling it up on your head. You can do this by repaying your student loan, EMI, and credit card bills on time.
In the 20s, you end up being careless and spending on fancy, luxurious, and classy things.
However, the focus should be on paying EMI, student loans, and credit card debt. Before you reach your 30s, ensure that your debt stands low.
5. Save in Liquid Assets
Investing a lot of amount in long-term illiquid assets will not help you to earn high because
- They come with difficult withdrawal terms.
- Investing in these instruments requires expertise.
The youngsters have short-term financial goals like marriage, going on a vacation, higher education, etc.
Locking up a huge amount of illiquid assets is a bad idea.
6. Educate Yourself About Personal Finance
It is important to invest time in learning about personal finance. You might outsource the task to make it simple and uncomplicated.
Further, there are chances that you don’t check the bank statements or credit card statements, thinking it is complicated.
You might consider TDS and refund as textbook concepts.
However, when you reach your 30s you understand that financial concepts are easy and it does not take too long to learn to understand and implement the basics.
So, start learning about it.
Instruments that can Help You to Save More
1. Buy a Good Health Insurance Policy
It is essential to create a health insurance policy before we reach to 30s. It is an important tool in your financial planning.
Though most employed professionals depend upon health insurance plans offered by employers, however, it comes with limitations.
Hence, you should buy a plan by looking for health insurance must-haves. A health insurance policy should offer you cashless hospitalization benefits, there should be no limitation on room rent, etc.
It will help you to have the best possible treatment.
The insurance policy should cover all medical aids and equipment that the patient is required to buy, and restore benefits- it is an accrued benefit that the patient gets once his insured amount is exhausted due to an emergency.
2. Investment in Stock Market
Another investment instrument that can help you in wealth creation is an investment in the stock market.
When invested regularly over time, a smaller amount helps spread out risks and helps you earn handsomely.
3. Treasury Bills
Treasury Bills are introduced by the government to offer you guaranteed returns.
These bills are subject to market risk and the Government uses these to meet short-term requirements.
These bills are introduced to regulate the economy’s fiscal deficit or keep the economy on track.
As an investor, you will get numerous benefits from investing in it.
For example, they are risk-free and offer you safe returns, they are liquid, and increase your exposure to the stock market.
However, these instruments are subject to market rate fluctuations.
Conclusion: Best Money Habits
We all make errors with our finances.
