Your 20s are when you transition into adulthood. Many decisions made during this period can have a lasting impact on your life. During these years, you start earning and have the financial freedom to be adventurous to a large extent. However, setting a few financial goals and making healthy financial decisions in this decade can save you a lot of pain and heart-ache in the years that follow.

Whether you have recently started working or are pursuing a distance education course while continuing your part-time job, you need to accomplish a few financial goals to secure your future. And all of this should ideally be done before you hit 30! So what are these goals? Let’s have a look:

1. Get insured

    

   You are at a stage where you need to consider the uncertainties of life. The sooner you start, the lesser your premiums will be. So you should not only get life insurance and health insurance, but consider insuring your material assets as well.

    

1. Save for retirement

    

   You may assume that your 20s are the time to be careless with your finances. However, it’s the ideal time to start saving for your retirement. Aim to have at least one year’s worth of salary saved for your retirement by the time you are 30. Understand the plans offered by your employer and explore other options as well, taking into consideration their maturity/vesting dates.

    

1. Strong credit history

    

   Build a carefully monitored credit history by using your credit card prudently and making payments/re-payments on time. When you want to take on larger responsibilities like starting your own business or building your own home, there is every possibility of needing a loan. A good credit score and credit history can work to your benefit.

    

1. Create an emergency fund

    

   A rainy day fund can be the biggest boon for you and your family in case of an unanticipated event. Many may find this unnecessary, but having 3-6 months of money saved for such an event is likely to provide some relief in bad time.

    

1. Befriending your taxes

    

   Understand how taxes work. Talk to your employer or the finance department in your company to understand your tax-saving options and how to make the most of them. There are several apps and websites available online, which can help you compute your taxable income and invest in tax-saving options accordingly.

    

1. Budgeting for your lifestyle

    

   Understand and critically examine your spending habits, your goals and savings plan. Make a realistic budget plan and try to stick to it.

    

1. Aim to be debt-free

    

   In your early 20s it is acceptable to make financial mistakes, but your 20s are also the time to rectify them. Although debt is not terrible, you do not want to be carrying debt with you forever, whether it is education loan, car loan, overdue credit card bills or personal loan. You should aim to be debt-free or at least close to it by the time you are 30.

    

Points to remember:

• Start setting aside some money for personal goals like building your dream home, higher education, travel plans etc.
• Try to understand how the stock market works
• Explore mutual funds
• Having another source of income can prove helpful, and
• Don’t invest all your money in one place, have multiple saving/investment options.

You don’t need to be a financial guru to be able to meet these milestones. All you need is research and some careful consideration when you are dealing with money.