4 ways to handle your personal finances in your 20’s.
1.Understand the difference between needs and wants
When we say needs, we are referring to something we require or something without which moving forward, growing or surviving might be difficult. However, when we use the word ‘want’, we are talking about desires. We are talking about something that is an extension of a want. Most of us in our 20’s, In the new technologically striven world are bombarded with many products, businesses and advertisements that sometimes we might think that your desire is what you want, however it’s not. This does not at all imply that you never accomplish your wants or expensive desires, it just means that don’t assume it is something you cannot live without.
2.Stock market investing
There is a famous saying ‘if everyone is doing it, it means it is not that hard.’ Most of us in our 20’s especially those who are in an environment that calls the shares market a ‘taboo’ or in any sense, fear investing in the stock market if they might fail or instantly lose money. Logically if we think about it if it was going to fail, then why would the world run it? If the stock market was that much of a failure how would individuals like Warren Buffet, George Soros make millions by investing in the right stock? If millions of people are investing in the stock market, that just implies that it is not rocket science!
What’s needed here is knowledge, a simple way of understanding stocks is reading about companies in newspapers (economics times), seeing the stock list of companies and their history. Knowledge is power once you know then why fear?
3.Learn how to earn
When we are in college and university usually our attention is drawn to relationships, partying, studying etc. because with the way our brought up we are made to think that only after we achieve our degree then we can start working but that is not true! Simple activities that you are good at, writing, drawing, singing, even if you are an extroverted individual and enjoy the company of people then marketing or selling! Every single individual has a talent that he can monetize WITHOUT getting a degree as well. Once again, this is not about dropping out or earning ‘big’ this is about taking your first step towards financial independence, begin early so you are prepared by the time you are out of college or university.
4.Make financial independence the goal
A year or two back a pang of sudden guilt crept into me where I was a bit uncomfortable with asking my parents for money for small things like going by taxi, going to the mall, buying a t-shirt and that sort of made me think if there was a way out of this. Here I had two choices, either I shamelessly keep asking for money and at some point, they will wonder why I am spending so much, thus I will have to compromise my wants or the second is find another, a growing source of income that can take care of these little spendings.
