Well, your 20s is your era when you experience many events first hand, for the first time. Like that perpetual joy of receiving your first paycheck and the utter disappointment of the incessant credit card debts!
There are only two kinds of people when it comes to money – one who save relentlessly and the other who spend recklessly. I belonged to the second kind, well, for the major part of my twenties at least; and then it dawned on me, somewhere down the soon-to-be-30s line – the importance of saving.
Now you all know the importance of money and saving, some of you might even know how painfully difficult this task is, so I will just point out three turning points that I guess made me promote myself from the reckless kind to the relentless kind, as mentioned above.
Do not get me wrong – I am the kind who needs a vacation every two months, I need a wardrobe renewal at every occasion, I have a fetish for trying out all the variety of cuisine that is there, I do not want to miss the popular concerts in the town and countless other avenues to have unaccounted and unnecessary expenditure; yet here I am advocating saving in your 20s.
I always used to think that living in the metros in our era, it is commendable even if I manage to lead a decent lifestyle, let alone save something; and that maybe if I had lived in small town, the situation would have been different. In other words, I came up with all possible excuses to justify my allegiance to a negative bank balance. I started believing in the theory that I would start saving more (or at least be free from all my debts) when I start earning more. Trust me, this never happens because living in credit is a chronic threat to your bank balance, the more you earn, the more you spend. Eventually, I realized that people who save, need no excuse to not being able to save. All you need is a little determination and some sense of adulthood.
I realized that life is unpredictable and I should be able to support myself and my loved ones when need be. I spent my first half of my twenties thinking that it was my time to live to the fullest, travel, and live carefreely. As I geared towards the rear end of my 20s, I was confronted with the impending peril of taking everything for granted. I watched in despair as my friend with near to zero savings, suddenly found herself supporting her entire family (consider funding your younger sibling’s education and your own marriage as your next task); just saying!
I guess it is one thing when you drool at some wonderful stuff in the mall when you are 21 and an entirely different saga of self-loathing when you find yourself in the same state 5 years later. Initially, you feel like, it’s not your timezone to afford that, and in the second case you doubt if you would ever be in that time zone where you can happily afford things that you yearn for and not think about money. What is the use of earning money if I STILL can’t treat myself?
Now I am no saving Guru, and I can absolutely not advise you on how to plan your savings and invest and make them grow exponentially, but I can definitely help answer the question “So where do I start from?”
1. Start small
This is something you would have heard a gazillion times, and there is a reason why. I started keeping aside a meager amount of money from my salary every month for my savings. It was a small start, but even if you save one-tenth of your salary every month, you can do the rest of your math. It isn’t the big amount that matters for us, but the feeling of having something surplus in your account at the end of every month is an enormous confidence boost to deter you from spending thoughtlessly. For me the initial months were a little difficult, to ignore that part of my salary that was to go into my savings, but eventually, you will love doing that!
2. Start saying NO
This one is tough, you will be labeled ‘boring’, ‘buzz-kill’ and the related ‘non-social-non-cool’ stuff, but it is fine. I never used to say NO. Let’s go brunching at the new restaurant. Yes, let’s go get booze at the uber cool rooftop bar. Sure, let’s go on a trip the next weekend. The problem with getting involved with other’s plan continuously to be social is that eventually, you do not have enough for stuff that YOU really want to do. I remember when I started saving up for my first international trip, I had to curb my social extracurriculars to a huge, huge extent. I said no to an all-girls’ trip at New Year, I said to no to the every alternate day booze scenes and I said no to dining out every weekend. No surprise I was subjected to many taunts, but in the end was my international trip worth it – hell yes!
3. Avoid your essential SIN
I love shopping; I love buying NEW dresses, shoes, accessories, cosmetics, and if I am not shopping for myself, I love buying that absolutely gorgeous set of linen for my bedroom, or some exquisite crockery set. Shopping is a SIN for me, I can go on and on about my shopping addiction, but my point is, AVOID doing this because you do not NEED it. If shopping for dresses is not your forte then maybe you have a thing for gadgets (you absolutely have to have the latest cool gadget in the market), or watches, or home decor, or maybe dining out very, very frequently. The thing with constantly indulging in your SIN is that you end up having too much of stuff that you could have absolutely done without! You deserve to treat yourself but watch out before it turns into a debt-friendly SIN.
4. A little time in analysis goes a long way.
If you are sure that you are not shelling out money heedlessly and you still end up with an exhausted bank balance by mid-month, you need to analyze your income vs expenditure. Trust me, when it comes to money, I had hardly cared and I lived with it for a long time; but when your expenditure ridicules you as weird numbers given out by Walnut, you have to cave in. Small cash and a series of random online transactions only make a strong impact when you see the absurd amount spent in various categories sorted out by such apps. There are many apps out there to make it easier for you, Walnut, Mint etc; all you have to do is decide which category of disbursement needs extra care next time.
5. Having an expensive taste and affording one are two different things.
Now this one might seem similar to shunning your SIN, except that this time it is not your addiction, but just one lavish, preposterous hobby, which your credit card bill fiercely disapproves of. Now, who doesn’t wish of owning and flaunting the super high-end brands once in a while? I am referring to that insanely expensive Tissot watch or the Jimmy Choo shoes or that Chanel perfume that you purchased on instinct. Trust me, these are ridiculously priced and I am not asking you to discard your love for an opulent lifestyle, but maybe the time is not right if it really burns a hole in your pocket. I once bought an exorbitantly priced dress and now one year later, it stares at me amusingly from my wardrobe, unused and new like ever; as I had no perfect occasion to sport that elegant look. Yes, I do not have a red carpet to attend right now, I learned it the hard way. So maybe those enormously rated watches, perfumes, shoes, and bags, are not worth it right now, and should wait just a little bit more, right?
6. Your credit card
Well, now that you have started saving, it only makes sense if you keep aside that credit card of yours, and live on your debit card. This way, you not only make sure that you are draining lesser money than you have but think of the interest you save by having zero credit. I have struggled for almost two years with a bill double the size of my salary and the forsaken interest that comes with it, but now that I am done with that, I can only pray not to be in that situation again. Now credit card to me is a means of overcoming the emergency situation and not a source of fulfilling my cravings for things that I could not, otherwise, afford.
I still stand by my early 20s view of not living by numbers, because these carefree, living in the moment experiences are precious and no amount of money saved is worth losing it, but I am just advocating a little carefulness and a little maturity.
Happy saving, you guys!