financial planning mistakes to avoid at your 20's


In terms of financial planning, the most crucial age period is 20-30. Most of us fail to do at this age. The time we enter into this age group, our minds will be focus completely on enjoyment.

There is no age limit for enjoyment. Following your passion should happen only after a strong fundamental is laid on.

Once you forget to plan your 20’sperfectly, your retirement will be in deep trouble. Let us dive into more clarity on the common mistake done by many youngsters.




The Comfort zone is the most dangerous zone in life. At the age of 20, our mind has to think beyond boundaries. The energy level will be at its peak compared to other age groups.

The comfort zone is formed by the job they employed in. Most people of this age group hopes, their life is settled once they get a job in an MNC company.

This is what they are been taught by parents and the education system for the last 20 years, and the same we do. So, it is not your mistake, but it’s your duty to come out of the worst zone.




The biggest fault of everyone’s life is not taking any risk. As long as you depend on a single job, the more risky your life is.

We have come across a few people, who are employed in a well-reputed company. Paid with a five-figure salary a month, even then they spent their weekends in freelancing with their skill set.

This not only adds them revenue but also more experience in their field over the person next to them.

Every company has terms and conditions, on its employees should not generate any income from other sources. If so, even rent is meant to be revenue. Most of the senior players of any company will be renting a home.

Have you ever think about this, there are many ways by which every person earns.

So, take risks in your life. Built your empire in your spare time.


This is a special tune that is played by millennials. In the early 1960s, 1970s the same young people started their savings first. The place people saved their money was a post office savings account.

In the current period, people first make a list for purchasing things even before been paid off with a first-month salary.

The biggest mistake is even worse, they tend to spend more than their income.

As per the live mint report, the EMI offers have increased from 6% in 2012 to 11% in 2019. These offers make people of 20’s purchase many things even if it is a current need. People forget that they can buy the same product in another 6 months of time as a goal.

This procedure of life is going to keep them under debt forever.

We came across with one of our client of age 24, currently 1-year experience in a job with monthly Rs. 20,000 income. He had bought a fridge, washing machine, Smart TV and Smart mobile in EMI. Now he is paying monthly EMI more than he earns.

This is a small example, there are many people traveling in the same situation.

When you spend more than you earn in terms of EMI as commitment. The feelings and frustration will shift towards your job, that they are not paying well. The underlying problem is with your nature of spending. You can’t become the CEO of your company in a year.


In one of our topic financial planning and goal based investment, we have clearly mentioned, save first and spent later.

Especially, the most important habit to develop in your 20’s. Every small mistake you do at your 20’s, will impact in a huge way at your 50’s. This is known as the butterfly effect.

So, avoid this mistake. We know few people across us, who have developed the habit of savings. You won’t believe at the age of 25, they have their term insurance, medical insurance, emergency funds, and few investments in equity.

What is the difference? It all depends on the mindset and habitual change over saving and investment.

We promise you if you don’t develop the habit of savings in your 20’s. There is only a minimal chance of developing at your 40’s or 50’s.



Robert Kiyosaki, the author of Rich dad Poor dad, has made a cash flow quadrant in his book. In which the right side column is filled with business and Investors. He has clearly mentioned these two category people are 3% in the world, who dominate almost 97% world’s wealth.

Businessman stated here is, one who has a minimum of 500 employees working for him. If lesser than that, it is termed as self-employee.

Investing in equity is easier than both the above two classes of investor and businessman. 10%-12% return every year for the next 30-40 years will make you a huge corpus.

Everywhere there is a risk, so don’t be afraid of risk. Take it at your young age where you have a huge runway and your risk will minimal. You can beat the market fluctuation in long run.



·       The best age group to change your life status is 20’s

·       Plan well on the future and develop the habit of savings and investments.

·       Avoids the major mistakes which are done by your age group.

·       20’s have long runway and if invested properly in this age group, the corpus at retirement will be enough to run the best life.