Smart Financial Plans At Your 20s


“Plan in such a way that you may live till 80 or 90; Live in such a way that death can happen anytime.”

Smart Financial Plans in your 20s:

Regarding financial planning, the fundamentals remain the same: Term Insurance, Medical Insurance, Emergency funds, and closing debts.

After the fundamentals, you must develop habits and plan your way to financial freedom. Here are the 10 golden financial plans every individual must follow in their 20s to enjoy a happy and peaceful retirement.

  • Plan your day.
  • Invest in yourself first.
  • Save first, Spend later.
  • Increase Streams of Income.
  • Never apply or use a credit card.
  • Never use Shopping Applications in Mobile.
  • Save the amount for the lease mortgage.
  • Never take any loans in life.
  • Invest in your 20’s and Get out of the rat race at your 45.
  • Plan your Retirement.

Plan Your Day:

The commencement of the 20s is when most of us kick off a new life when a career comes to us, and we start to earn some money. Few people will be taxpayers, too.

Each Individual’s 20s is when most of us kick off a new life, a career comes to us, and start to earn some money. Few people will be taxpayers, too.

Everyone is given the same 24 hours in this world. But why are only 35% of them successful? Have you ever come across this question?

The only answer is they plan their day well in advance, prioritize their goals, and allocate energy in such a proportion.

Invest In Yourself First:

  • Investing means saving a part of your income and investing it in bonds, fixed deposits, PPF, mutual funds, or equity.
  • More than that, it is important to invest in developing knowledge and learning new skills, which will lead to future technology and development in our early 20s.
  • Developing or learning a new skill is not about paying an amount to join a crash course; rather, it is investing your time to learn new skills. In this technology era, it is possible to get all the needed packages through YouTube and other free educational tools.
  • You can also learn a few courses with monetary payments if required. However, it’s not always advised.

Save First, Spend Later:

  • Only few people do a proper monthly budget. Even though they start their budgeting from loans, EMI, rent, other expenses, finally there will be a column for savings too.
  • Some people have a slogan saying whatever is left after all expenses will be safely kept for savings. But what happens? This ultimately ends up with zero savings.
  • These kind of mentality will never lead you to save or invest. It can never make you financially free.
  • Once you receive your monthly income or business payments, first move at least 30-50% of your income into savings.
  • The best way to do this is activating “AUTO DEBIT” option through your bank and invest in your portfolios.

Increase Stream of Income:

  • From most of the people’s interactions, we can see that they plan to change jobs whenever they face financial challenges to get an instant 20-30% pay hike.
  • This is not the correct way to plan your finances in your 20s. You should have planned ahead for your goals and dreams and lived accordingly.
  • If not, you must plan to increase your income stream in your 20’s.
  • If you have more than 1 stream of income, you do not need to rely completely on the primary source of income. You can also increase the number of streams.
  • If you want to be financially free in your 40s, you must have at least five streams of income.

Never Apply or Use Credit Card

The moment when you start financial planning in your early 20’s and set a goal, the foremost thing to avoid is the USAGE OF CREDIT CARDs.

Many people, particularly those in their 20s, have more than one credit card.

These credit cards throw you more offers by partnering with the business dealers and tend to make you buy the product without allowing us to understand financial stability and income.

Credit cards will never develop the habit of delayed gratification.

Note: Charges and interest rates of credit cards will be discussed in future topics.

Never use Shopping Applications in Mobile:

Nowadays, e-commerce is everywhere, like Amazon, Flipkart, etc. This kind of commerce platform is provided with the application and is more updated on our mobile.

Whenever we use mobile, we tend to open these applications. The offers in them shoot out our instant gratification eventually leading us to buy products and causing us financial burdens.

Please delete all applications related to shopping or food. If necessary, please use web browsers to buy products.

Save Amount for Lease Mortgage:

  • Life in your 20s will have fewer commitments, so it’s the right time to save more money.
  • The most important thing is to remember that your marriage life is nearing you and on its way soon.
  • Most of us won’t get a job in our native, so we move to top cities and stay therein a house for rent.
  • To avoid rent, plan your savings in the early phase, to develop the desired amount for a lease mortgage, which eventually makes you save the rent amount and increase your wealth.

Never Take Any Loans:

  • Nowadays, there are various ways to make you a debt creator.
  • There are many options, and you can take any loan, like a bike loan, mobile EMI, Home Appliances EMI, car loan, home loan, personal loan, business loan, etc.
  • These will never give back your assets to you, except for business loans. The chance of yielding more profit in business is minimal as you have to pay debt interest.
  • These kinds of loans are a liability and will depreciate your wealth.
  • If you keep on accumulating these debts, you will never become financially free and will continue to participate in the 9-5 rat race until you are 60.

Invest at your 20s and Get out of Rat Race by 45:

We all know that investing for a long period will yield more capital gain as the power of compounding is involved in it.

When you start saving 30-50% of your income in your 20s with a proper plan for financial goals, you will be damn sure you will get out of the rat race at your 45.

To be out of a 9-5 job at 45 is a big dream for most people in this world, but only a few who do financial planning properly and do it with discipline, consistency, and persistence achieve it.

Plan Your Retirement:

Most of us don’t know that there is a life after retirement.

In that time, the expenses for life continue, and income becomes zero.

This is when most of us will build a home, conduct matrimonial functions, sudden medical emergencies, etc.

If you don’t plan your retirement in your 20s, you will end up with zero corpus and become dependable on your children. Remember, at that time, your children might have a family and have their own commitments.

To live until 80, we should have a minimum corpus of 5 crores at the time of retirement.

Note: Retirement Planning is a big subject we will take through in the future.


  • Primarily, you have to be stable with fundamentals of financial planning like Term & Medical insurance and emergency funds.
  • Then, you should develop financial planning habits like Discipline, Consistency, Persistence, Non-Procrastination, and Delayed gratification.
  • Plan your day well in advance, invest in yourself, and save first rather than spending.
  • Increase your income stream, which will allow you not to rely on a single job and allow you to achieve your financial goals very quickly.
  • Never apply for or buy any sort of Credit card, Loan, or shopping application.
  • Plan your retirement, start saving from your early 20’s get out of the rat race by 45, and have a happy retirement with 5 crores as corpus in hand.