5 Ways to manage money in your 20s


My dear friend, If you are also in your 20s like me, who has a big dream but don’t know how to start. So here I bring 5 Ways to manage money in your 20s.

This is where I will share my idea of improving your life area, specifically “finance” because to achieve any kind of dream you 101% need money.

And trust me “managing money” will be one of the most important skills you would ever learn in your lifetime.

I will share with you my 5 ways of managing money that I learned from books, finance experts such as Robert Kiyosaki, and also through hard ways. I recommend you read “Rich dad poor dadto understand money.

Remember this is no hard and fast rule, you may change it according to your suitability. This works for me so I work accordingly and will explain to you how?

#1  Earn Money

  • Of course, to do anything you need money, you need to earn it. You can earn from a job, freelancing, business, or by selling anything. But first and foremost you need some money coming in.
  • Does this seem difficult? As a fellow Vicenarian can say, YES! Because this age of 20s is a confusing time, we don’t actually know what to do exactly, so it becomes difficult to choose anything in particular.
  • But that’s alright you can test and try, and see what works for you, people will say you need to get a job to earn money, but in reality, people don’t know other ways to make money other than a job.

#2 5:4:1 Rule

A simple rule that will help you manage your funds well from now, so it goes like 50% savings, 40% investing, 10% expenses.

Let me explain to you…

  • If you are also from a middle-class family chances are you probably don’t have much idea about taxes, so starting saving 50% is a good idea in a long term, once your income reaches a particular limit, like in India if your income exceeds 2.5 lakh you are bound to pay 5% tax on your income.
  • So saving 50% will help you have savings for emergencies as well as to pay taxes. Taxes will differ from country to country so I would suggest you look up YouTube or Google to get a good idea of taxation policy in your country.
  • Certainly in India maximum tax, an individual has to pay is 30% of his annual income. So saving 50% is always a good idea.
  • Once you have saved enough for tax and savings you can use a major portion of the remaining money in creating more assets.
  • The amount of money you can invest will vary from person to person, as I am in my early 20s I don’t have much responsibility so I can invest a major part of my income.
  • 10% you can spend on misc expenses or treating yourself once in a while. Of course, you are doing good so you deserve enjoyment time as well.

3# Don’t invest money that you can’t afford to lose.

  • Now, how many times have you come across a person saying we are forex traders, invest x amount of money and we get 5x your investment in just a week.
  • Chances are many times. I used to receive almost daily, people asking me to invest with them and for curiosity purpose, I did try them out. Not once but many times, and guess what I lost money all the time.
  • If you have 50k with you, you have 20k to invest, and you find an opportunity to invest but the cost is 30k, you can invest but after that, there would be nothing left with you and you have many responsibilities.
  • Then better to find something else or wait until you can invest that much amount. Without getting in trouble yourself.
  • Well various options, share market, NFT’s, cryptocurrencies, online assets, SIP, etc. But before investing do take time to educate yourself about it.

Like the Share market, people think it’s a gamble, but it’s not. Gamble is anything in which you put money and pray to make a profit. Whereas in share market we analyze the trend, economy, company, then we forecast whether to invest or not.

4# Learn Taxation rules

  • You won’t be able to understand it on the first try, you go step by step learning about the processes and how taxes actually work.
  • Learning about tax is an important part of finance management. Sooner or later you have to pay taxes, better to learn now and improve your knowledge.
  • Taxation policy varies from country to country. The highest a person has to pay tax in India is 30%, In UK it,s 45%, in the USA it’s 37%.

Now comes…

What if we are working with an international client? Well in that case you pay income tax annually.

5# Living below your means

You must have heard of it, but how does one actually live below his means?


  • let’s say you earn 15k INR(200$) a month, you saved 7k(100$), invested 4-5k(60-70$) what you are left with is extra money that you can use for misc activities.
  • Choices, you can eat at a fancy restaurant or at a normal restaurant, you can choose a fancy dish or a stomach fulfilling dish, You can choose to take a cab or go by bus.
  • We don’t make unnecessary purchases or take unnecessary luxuries.
These are my 5 ways to manage finances, hope this clears out a lot of stuff and gives you some actionable steps that you can take right now to improve your financial stand.

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