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5 Important habits to develop in your 20s for a wealthy future

  • Highlights

  • Prepare for a secure future by investing smartly

  • Capitalize on financial independence during your 20s

  • Avoid borrowing money & track expenses with an app

  • Be accountable for the money you lend & spend

Your early twenties bring in several personal, professional and financial opportunities, which directly impact your future. Even small steps can go a long way in helping you build a strong future.

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Here are some smart habits to develop, which can help you build more wealth.

1. Identify good debt from bad debt

Instead of casual borrowing, take loans to attain your financial goals like buying a home, completing higher education or starting your business. Such debts are investments that grow in value and generate long-term income. Repaying your loans on time can also help you improve your credit score and keep your finances in check.

2. Leverage technology for smart financial management

With new-age financial apps, tracking your expenses is easy. You can use such apps to draw up a monthly budget and get an overall view of your income. It can also help you adjust your expenses, depending on your figures.

With an effective money management app, you can also identify unnecessary expenses, so you don’t over-extend your finances.

You can also set up an auto-payment system for your home bills like rent and electricity, so you don’t incur late fee if you forget to make important payments. Auto-reminder options in your app will also help you save before you spend.

3. Don’t spend all the money you earn

The best way to ensure you are not spending everything you earn is to invest. You can choose fixed deposits or SIPs to invest slowly yet steadily and gain returns. Coming up with plans for your future, like buying a house in your thirties or purchasing a vehicle for yourself in 5 years is a good way to ensure that your savings become more focused.

3. Be accountable for the money you lend

Lending money to someone in need is an act of kindness, but valuing your hard-earned money is equally important. So be conscious of the money you are lending to friends. Don't feel embarrassed to ask the borrower tell you his or her payback plan, and ensure that you can afford to lend the amount the borrower is asking for.

4. Curb over-spending

In your mid-twenties, you are likely to be staying away from your family. So, you are fully responsible for your money and your own life. While you have the right to spend your money the way you want it, avoid succumbing to peer pressure.

When you are hanging out with friends, it is sometimes hard to control what you are spending. The best way to tackle this is by setting a budget for your social outings. Learn to say no to things that don’t align with your financial goals.

Additional Read: 5 Smart Financial Steps Young Adults Should Take In 2018

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Additional Read: How To Manage Your Money More Effectively?

5. Devise plans to meet your financial goals

Having goals help you stay on track with your finances. Have quarterly, bi-annual and yearly goals for best results. You can break up your goals into small and big ones. Buying your loved one’s a gift can be a small financial goal while buying yourself a car can be one of the bigger goals. These will keep you in check financially, and achieving them will also give you sense of confidence!

These 5 habits will go a long way to ensure that you are not only financially self-sufficient in your 20s, but also at the top of the ladder throughout your life.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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