Your early years are full with exciting things, like first earnings, new adventures, and dreams of financial independence. and a great deal of uncertainty around money. Among the most frequent questions from individuals in their 20 is:
“Should I start investing early or focused on saving money?”
Investing and saving are both crucial, but how much and when depends on your objectives, attitude, and degree of risk tolerance. Let’s explore it in a simple way that makes sense.
What Saving Really Means
Saving is basically keeping money safe for short-term needs — like an emergency, a trip, or buying a new phone or laptop.
You usually put it in your savings account, FD (fixed deposit), or digital wallet, where your money is easy to access but grows slowly.
Benefits of Saving:
–Minimum risk (your funds are secure)
-Simple access when you require it
-Comfort in the event of an emergency
Drawbacks of Saving:
-Low returns: There is little growth in your money.
-Your purchasing power slowly decreases due to inflation.
💡 Consider saving as a safety net rather than a strategy for personal development.
The True Meaning of Investing
Purchasing assets that increase in value over time, such as stocks, mutual funds, gold, or real estate, is known as investing.
It’s about taking balanced chances now in order to gain greater benefits later.
Benefits of Investing:
-Increased returns over time
-increases wealth and financial independence
-aids in overcoming inflation
Drawbacks of Investing:
-includes risk; values may increase or decrease.
-requires a little knowledge and patience.
💡 Investing is not about paying your bills next month, but about developing your future.
So, in the early twenties, which one should you focus on?
The ideal response? Both, yet in balance.
The optimum time to develop sound financial habits is in your 20s. To get started, all you need is consistency rather than a large salary.
This is a basic road map 👇
1. First, create a safety fund by saving first.
Make sure you have a little safety net in your bank account—at least three to six months’ worth of expenses—before you begin investing.
Having this reserve will prevent you from panicking in the event of an emergency because life is unexpected.
2. Begin Small Investing
Invest as soon as your emergency fund is ready, even if it’s just ₹500 or ₹1000 each month.
You may begin with:
SIP (Systematic Investment Plan) in Mutual Funds
ETFs, or index funds
PPF or NPS for tax advantages and long-term savings
Starting early rather than correctly is crucial. Compound interest benefits you more the earlier you start.
3. Continue to Learn and Modify
As you change, so do your financial habits. Increase your investment percentage rather than just your spending as your income rises.
Read, pay attention, and maintain your interest in personal finance. Your decision-making becomes smarter as you get more knowledge.
A Brief Example
Assume that at age 22, you begin investing ₹2000 per month with an average yearly return of 10%.
You’ll have about ₹4 lakh by the time you’re 32.
However, you will only have roughly ₹2.4 lakh if you start five years later.
Your 20s are your greatest financial advantage—that’s the magic of time!
You stay protected when you save.
Investing promotes personal development.
Both are essential, but in your 20s, it’s important to start small, maintain consistency, and consider the big picture.
To begin investing, you don’t have to be wealthy. You only have to get started.