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10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them

By
Sanjay Kumar
-
23
10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them
10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them

One of the most significant life skills is money management; however, the majority of Indians move to adult age without financial education. Consequently, individuals in their twenties and thirties commit money errors that can be prevented, which affects financial security in the long-term. The good news? All these errors can be corrected, with knowledge and at the right time.

10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them
10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them

These are the 10 most widespread money blunders young Indians commit – and how to rectify them.

1. Living Paycheck to Paycheck

Most of the younger ones use all their monthly wages, leaving very little or no money to invest in case of an emergency or on future aspirations. This way of life causes financial pressures and constraints.

How to fix it

  • Adhere to the 503020 (50 percent need, 30 percent want, 20 percent savings/investments).
  • Develop a saving habit after your salary has been credited.
  • Have a minimum 3-6 month buffer of expenses.

2. Delaying Investments

The youth have a tendency to assume that they can invest later. However, any postponement, even a few years, makes the power of compounding extremely small.

How to fix it

  • Start SIPs in mutual funds of even 5001000.
  • Select long-term investments in equity.
  • Hike investments with rise in income.

3. Depending on Savings Account Only.

Conservative saving cultures ensure that the money remains stagnant in the low-interest savings accounts rather than letting it be increased.

How to fix it

  • Diversify: PPF, Equity mutual funds, gold, NPS, REITs and fixed deposits.
  • Choose your match investment type according to goal period: long-term is equity; short-term is debt/fixed returns.

4. Extravagance on Lifestyle Upgrades.

Smartphones, gadgets, popular dining out, fashion craze, weekend holidays, the need to appear successful, etc, there is a lot of stress to spend money, yet it is not always necessary.

How to fix it

  • Make a distinction between needs and wants.
  • Have a monthly fun budget, and adhere to it.
  • Do not do impulsive and emotional shopping.

5. Misusing Credit Cards

Credit cards are handy, though most of the young Indians treat them as free money resulting into debt traps and bad credit scores.

How to fix it

  • Never leave out paying the full amount only the minimum.
  • Use less than 30 percent of the credit.
  • Use multiple cards that are not necessary.

    10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them
    10 Common Money Mistakes Indians Make in Their 20s & 30s — And How to Fix Them

6. Not Having an Emergency Fund

Unforeseen events such as loss of employment, hospital expenses or unforeseen traveling might occur any time. In the absence of any emergency fund, individuals turn to loans or friends.

How to fix it

  • Yield 3-6 months of savings in a savings or liquid account.
  • Monthly transfers into this fund should be automated.
  • Only in real crises.

7. Health and Term Insurance: Neglected.

Majority of the population thinks that they do not need insurance when they are young but eventually medical emergencies or misfortunes may occur at any time.

How to fix it

  • Obtain health insurance when young in order to have reduced premiums.
  • Buy term plan when you have dependents.
  • Do not confuse insurance and investment (endowment/ULIPs).

8. No Clear Financial Goals

Money usually goes down the drain without proper planning. This slows wealth creation.

How to fix it

  • Goal definition: purchase a home, tourism, marriage, setting up shop, retirement.
  • Classify as short term, medium term and long term goals.
  • Allocate investment to every goal.

9. Being a Falling Prey to Quick-Rich Schemes.

Cryptocurrency frauds, Ponzi schemes, double your money schemes — young earners are usually defrauded because they lack advice.

How to fix it

  • When returns are so good they are often too good to be true.
  • Do not invest in unregulated investments.
  • Invest your brain before investing your money.

10. Omission of Tracking Expenses and Budgeting.

So many individuals are not aware of the fate of their money. Budget deficiency will most likely result in excessive costs and financial mismanagement.

How to fix it

  • Install applications such as Moneyfy, Walnut, or tracking in Google sheets.
  • Look over your monthly costs.
  • Minimise and reduce spending of low priority.

Final Thoughts

The strong years of your financial life are with your 20s and 30s. Currently, your habits either are going to help you become financially free or fight in the future. With such small but constant changes, you can build your future, minimize the stress levels, and establish long-term wealth.

Remember:
I would get up early, keep disciplined and never work later than your money, but work first and then later.

Read More: Best Health Insurance Plans in India 2025: Top 5 Policies You Must Compare Before Buying

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