Career and relationship mistakes may be inevitable, but with a some research and smart decision-making, you can avoid money-related mistakes.(HTArchive)
Career and relationship mistakes may be inevitable, but with a some research and smart decision-making, you can avoid money-related mistakes.(HTArchive)

Here are 5 financial mistakes to avoid in your 20s

If you are unable to make a financial plan, you may want to consult a professional. The standard advice is in your 20s, you must save between 10% and 15% of your income for retirement.
By Nisreen Mamaji
UPDATED ON JUN 10, 2019 08:16 AM IST
Your 20s are a tumultuous time. Most of us make mistakes during this period in career, money and relationships. It’s a period to learn and unlearn. Career and relationship mistakes may be inevitable, but with a some research and smart decision-making, you can avoid money-related mistakes. Here is how:
INVESTING IN INSURANCE POLICIES
If you are 25 years old and pay a premium of 31,000 annually for a 10 lakh insurance cover for an estimated maturity amount of 35.6 lakh in 30 years, you could have alternatively opted for a 1 crore policy for 30 years at a premium of about 7,900 and invested the balance 23,000 into diversified equity mutual funds.
If the funds returned a yield of 12%, your corpus would be 62 lakh after 30 years. Here the opportunity cost of making this mistake is 26.4 lakh. Insurance products should be used for protection while asset management companies should be entrusted with the task of managing investments. The cost structure and returns potential of traditional insurance policies such as endowment and money back do not compare favourably with mutual funds. Unit-linked insurance plans (Ulips) attempt to do the job of insurance and investment but the recommended route is to bifurcate both requirements and then proceed.
GAMBLING IN STOCKS
Let’s assume you get a tip from a friend to invest in a penny stock and you took the tip and put all your money in the stock which unfortunately got delisted a year later. Your stock will be worthless. Or say you bought a stock of a bluechip pharma company which later ran into regulatory problems and its price nosedived. If you need the money for an emergency, you would have to sell the stock at a loss. There are innumerable examples of investors who are not equipped to select stocks on their own and this can be termed a gamble. As there is an option of a professionally-managed product such as mutual funds which invest into equity, debt and hybrid and you can tailor make a plan to suit you.
FAILING TO PLAN
A good financial plan is absolutely necessary to maximise your income, help you invest smartly and avoid unnecessary taxes every year. If you are unable to make a financial plan, you may want to consult a professional. The standard advice is in your 20s, you must save between 10% and 15% of your income for retirement. Prepare a list of other goals including home or vehicle purchase and ensure you pay them yourself.
However, first automate the savings process so that your account gets deducted through systematic investment plans pegged to your goals before you shop.
SPENDING EXCESSIVELY
The secret to building wealth is simple—live within your means every month. Spending beyond your means isn’t sustainable, as you’ll soon see when the bills start piling up. Learn to be happy with what you have. Spend less, and you’ll find financial freedom is more empowering and gratifying than trying to keep up with others.
ALLOWING CREDIT CARD DEBT TO ACCUMULATE
The first mistake is letting your credit card debt spiral out of control, be it because you use your credit card for every purchase or because you aren’t watching your total debt . You may also be paying back only the minimum amount due on your card and the interest which is averagely 3.5% monthly quickly compounds to an unmanageable figure. Your credit score is based on your history, so if you miss payments, it could haunt you for decades to come.
(Nisreen Mamaji is a certified financial planner and founder of MoneyWorks Financial Advisors)
SHARE THIS ARTICLE ON
app
Close
Petrol and diesel became costlier by 25 paise per litre on Tuesday in the Capital(Reuters)
Petrol and diesel became costlier by 25 paise per litre on Tuesday in the Capital(Reuters)

Govt may not reduce excise duty on fuel soon: Official

By Rajeev Jayaswal, New Delhi
PUBLISHED ON JAN 20, 2021 12:21 AM IST
The retail inflation, as measured by the Consumer Price Index (CPI), was at a 77-month high at 7.6% in October. Although it softened a bit to 6.9% in November, it was still above the Reserve Bank of India’s medium-term target of 4%, with a band of plus or minus 2%.
Close
Investment bankers and traders have carried the load for their firms this year as consumer divisions came under pressure from the Covid-19 outbreak that shut down businesses and put millions out of work.(REUTERS)
Investment bankers and traders have carried the load for their firms this year as consumer divisions came under pressure from the Covid-19 outbreak that shut down businesses and put millions out of work.(REUTERS)

Bank of America’s trading unit falls short of rivals during bumper year

Bloomberg
PUBLISHED ON JAN 19, 2021 08:03 PM IST
Revenue from sales and trading rose 7% to $3.06 billion in the fourth quarter, missing analysts’ $3.15 billion forecast.
Close
The bank's shares surged 2.6% in early trading, adding to a 20% gain in the past year.(REUTERS)
The bank's shares surged 2.6% in early trading, adding to a 20% gain in the past year.(REUTERS)

Goldman Sachs profit more than doubles on underwriting, trading boost

Reuters
PUBLISHED ON JAN 19, 2021 07:56 PM IST
Revenue from global markets, which houses the bank's flagship trading business, registered its best annual performance in a decade. Sales at the unit surged 23% to $4.27 billion in the quarter, raking in $21.2 billion in the full year.
Close
HDFC and Reliance Industries were the most significant contributors to the benchmark index gain.(HT Photos)
HDFC and Reliance Industries were the most significant contributors to the benchmark index gain.(HT Photos)

Investor wealth zooms 3.41 lakh crore as markets witness massive buying

PTI
UPDATED ON JAN 19, 2021 07:55 PM IST
Following the upbeat sentiment, the market capitalisation of BSE-listed companies jumped 3,41,846.01 crore to 1,96,19,149.34 crore.
Close
Under the relaxations, the abridged letter of offer, application form and other issues material to shareholders can be undertaken by electronic transmission as already provided under the ICDR (Issue of Capital and Disclosure Requirements) norms.(PTI File Photo)
Under the relaxations, the abridged letter of offer, application form and other issues material to shareholders can be undertaken by electronic transmission as already provided under the ICDR (Issue of Capital and Disclosure Requirements) norms.(PTI File Photo)

Sebi extends relaxations for compliance with rights issues

PTI
PUBLISHED ON JAN 19, 2021 07:48 PM IST
Based on the representations received from the market participants, the validity of relaxations is further extended and shall be applicable for rights issues opening up to March 31, 2021, the Securities and Exchange Board of India (Sebi) said in a circular.
Close
According to a report pencilled by the India economist at UBS Securities, Tanvee Gupta Jain, the country has the lowest manufacturing costs among peers, even though China retains significant ecosystem advantages and despite that India and Vietnam appear most likely to benefit from a shift out of China. (Representative Image)(MINT_PRINT)
According to a report pencilled by the India economist at UBS Securities, Tanvee Gupta Jain, the country has the lowest manufacturing costs among peers, even though China retains significant ecosystem advantages and despite that India and Vietnam appear most likely to benefit from a shift out of China. (Representative Image)(MINT_PRINT)

India to contribute 15% of global growth by FY26: Report

PTI
PUBLISHED ON JAN 19, 2021 07:39 PM IST
The report expects the large local market potential, low labour costs, macroeconomic stability and the hope of strengthening ongoing reform momentum will help achieve these objectives.
Close
WhatsApp had announced the changes in January and had asked users to agree to the terms before February 8, 2021, to continue the usage of their services.(HT Photo)
WhatsApp had announced the changes in January and had asked users to agree to the terms before February 8, 2021, to continue the usage of their services.(HT Photo)

Withdraw privacy policy updates: What Centre said in its letter to WhatsApp CEO

By hindustantimes.com | Written by Srivatsan K C
PUBLISHED ON JAN 19, 2021 07:00 PM IST
From asking WhatsApp to withdraw their proposed changes to a long questionnaire, here is what the government said in its letter.
Close
The 15th India-EU Summi will be held via video conference on July 15.(Reuters)
The 15th India-EU Summi will be held via video conference on July 15.(Reuters)

First India-EU IPR dialogue held to strengthen relation

ANI, New Delhi
PUBLISHED ON JAN 19, 2021 06:41 PM IST
The ministry informed that the various initiatives taken up by the Indian government in this context were appreciated by the EU representatives.
Close
A man speaks on his mobile phone as he exits a glass door with the logo of Maruti Suzuki India Limited at a showroom in New Delhi, India.(Reuters)
A man speaks on his mobile phone as he exits a glass door with the logo of Maruti Suzuki India Limited at a showroom in New Delhi, India.(Reuters)

Maruti shares gain over 1% as company hikes prices of select vehicles

PTI
PUBLISHED ON JAN 19, 2021 06:11 PM IST
The country's largest carmaker on Monday said it has increased the prices of select models by up to 34,000 to offset adverse impact of rising input costs.
Close
A Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land following a test flight in Seattle.(File Photo / AP)
A Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land following a test flight in Seattle.(File Photo / AP)

Boeing 737 Max to get EU flight clearance next week

Reuters
PUBLISHED ON JAN 19, 2021 06:08 PM IST
The EU Aviation Safety Agency is one of the last major regulators to approve changes to the Max and its anti-stall software, blamed for two deadly crashes.
Close
Foreign portfolio investors bought $2.44 billion worth of Indian stocks in January ht(MINT_PRINT)
Foreign portfolio investors bought $2.44 billion worth of Indian stocks in January ht(MINT_PRINT)

Mindtree shares close over 1% higher as net profit jumps

PTI
PUBLISHED ON JAN 19, 2021 06:07 PM IST
The Bengaluru-based company had posted a net profit of 197 crore in the year-ago period. Its revenue grew 3 per cent to 2,023.7 crore in the quarter under review, from 1,965.3 crore in the year-ago period.
Close
World No Tobacco Day 2020: Dispelling myths about tobacco use, cigarettes and vaping.(Unsplash)
World No Tobacco Day 2020: Dispelling myths about tobacco use, cigarettes and vaping.(Unsplash)

Changes in law on cigarettes, other tobacco products to impact F&B sector: NRAI

PTI
PUBLISHED ON JAN 19, 2021 05:59 PM IST
The proposed amendments will not only hugely inconvenience the consumers but will also adversely impact the overall consumer sentiments, the National Restaurant Association of India (NRAI) said in a statement.
Close
Oil prices have been supported this week by a pledge by Saudi Arabia, the world’s biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March.(Reuters/ File photo)
Oil prices have been supported this week by a pledge by Saudi Arabia, the world’s biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March.(Reuters/ File photo)

Oil prices rise as investors look to higher demand seen in second half

Reuters
PUBLISHED ON JAN 19, 2021 05:53 PM IST
Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after slipping 35 cents in the previous session.
Close
The changes could hurt Amazon as it holds indirect equity stakes in two of its biggest online sellers in India.(Reuters )
The changes could hurt Amazon as it holds indirect equity stakes in two of its biggest online sellers in India.(Reuters )

Govt plans foreign investment rule changes that could hit Amazon

Reuters, New Delhi
PUBLISHED ON JAN 19, 2021 05:46 PM IST
The 2018 rules forced Amazon and Flipkart to rework their business structures and soured relations between India and the United States.
Close
"The concessionaires are required to take up the Guwahati, Jaipur and Thiruvananthapuram airports fulfilling certain conditions precedents within 180 days from 19th January, 2021," the Airports Authority of India (AAI) said in a press release.(HT Photo)
"The concessionaires are required to take up the Guwahati, Jaipur and Thiruvananthapuram airports fulfilling certain conditions precedents within 180 days from 19th January, 2021," the Airports Authority of India (AAI) said in a press release.(HT Photo)

Adani Group signs concession agreements with AAI for developing 3 airports

PTI
PUBLISHED ON JAN 19, 2021 04:57 PM IST
The Centre had in February 2019 privatised six major airports of the country -- Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati. Through a competitive bidding process, the Adani group won the rights to run all of them for 50 years.
Close
SHARE
Story Saved
OPEN APP