With the following simple hacks and smart money-saving tips for women, you can gift yourself a financially free and independent future. Here’s how!
The 20s are a new beginning in the journey we call life. We complete our academic studies and enter the real world to build our careers.
We, as women, are heading towards financial freedom and independence at a pace the world never witnessed before.
If we can manage our money in our 20s and make informed financial decisions, then we can achieve financial freedom in no time.
What are some of the smart money-saving tips for women that we should follow in our 20s? Let’s find out!
Smart Money Saving Tips for Single Women in the 20s
Following are some of the smart money-saving tips for women that we can use in our 20s:
Prepare a Budget
We must prepare a budget.
As women, we truly desire in our 20s to live our life to the fullest. However, we should remember to care for our finances to become financially independent. And if we start in our 20s, we can have a great financial future.
Therefore, it is important to create a budget and allocate our income.
For making the budget, we can follow the 50/30/20 rule. It states that we should allocate 50% of our income towards our needs and necessities, 30% towards our wants and desires, and 20% towards savings and investing.
This ensures that while we enjoy our life, we also save and invest regularly.
Keep track of Expenses
Another important money-saving tip for women is to ensure that expenses are constantly tracked.
This allows us to determine where we are overspending and cut our expenses.
We often lose track of our expenses and then wonder where our income got spent.
There are various apps available that we can use to track our expenses. Why not take advantage of the technology?
Generate Multiple Income Sources
Today’s world is full of opportunities.
We can be employees in our day job and writers in our off-hours. We can sell paintings and earn a decent amount.
Then why rely on a single source of income when there are limitless opportunities out there waiting for us?
Further, we can use our extra earnings to fulfil our dream and increase our savings and investment.
Don’t Forget the Insurance
We must have life and health insurance in our 20s.
During our 20s, we are young and healthy, and the possibility of catching a lifestyle disease is low. Therefore, we can get insurance at affordable premiums.
While health insurance ensures that we are financially secure from medical expenses, life insurance ensures that our loved ones are financially secure in case of an unexpected mishap.
We should take advantage of lower life and health insurance premiums while in our 20s.
As we age, we will only have higher premiums to pay and regret not getting insured in our 20s.
Plan for Retirement
Why skip retirement planning for your 30s or 40s when you can do so in your 20s? You can start saving small for retirement planning.
If we begin in our 20s and remain consistent till our 60s when we retire, we can witness the magic of compounding.
Let’s see a simple illustration to understand better:
Suppose we decide to invest Rs. 10,000 each month for retirement at the age of 25 and continue to do so till the age of 60. Following will be our portfolio at different stages of life, assuming we are earning a return of 10% per annum on our investments:
You can witness how the portfolio grows at such a magnificent speed in the later years.
This is because of the compounding benefit. Compounding means the interest on principal and interest component.
The more time we stay invested, the more compounding benefits we receive.
Stay Away From Expensive Habits
In our 20s, we often are attracted to branded and other stuff. We love shopping, don’t we?
But we must understand that excessive shopping can take a huge toll on our pockets if we don’t control it. Further, it is better to go for generics than brands as they are relatively cheaper and of good quality.
If we avoid our expensive habits, we can save and use that amount to invest in different avenues.
Smart money-saving tip for women, isn’t it?
Don’t Rely Excessively on Credit Cards
Credit cards are some of the most beneficial financial tools, but they can also be our worst nightmare if we don’t use them judiciously.
It can harm our finances and dent our CIBIL score in ways we never imagined. Avoid maxing out credit cards at all costs.
Secondly, ensure that you pay your credit card bills within the due dates.
Always remember that credit card companies charge a very hefty interest that can range from 18% to as high as 36% per annum. That’s 3% per month.
Further, non-judicious use of credit cards can land us in a debt trap that will take a while to recover from.
In a Nutshell
The suggestions above are some of the best saving tips for women that, if followed wisely, can help us achieve our goal of financial freedom. The 20s is when everything is at its maximum – whether it’s about time, energy or risk-taking capacity. Why not use our 20s to build a great financial future by actively making informed financial decisions so we can live a financially happy and content life in the later stages?
So gear up, women and start planning for the life you always wanted to live! One of the most effective ways to achieve financial freedom is to automate your savings. Sounds interesting. With Jar, you can automate your savings and make digital gold investments starting with just Rs. 10. Take your first step now!