While spending money may come naturally to many of us, managing it often feels like a mammoth task, let alone understanding the numerous investment options available. This is especially true for Gen Z, who often find themselves lost when it comes to investing money. We have an expert sharing an easy investment guide to help Gen Z get started
Saving is crucial for Gen Z and people in their 20s because it helps create financial security and prepares them for future goals. Photo Courtesy: iStock
Having a zero bank balance by the end of every month has become a natural occurrence, especially for Gen Z. From investing in SIPs to buying gold, we find parents and relatives lecturing the young, especially those in their early 20s who have recently begun earning, on the importance of saving and handing out numerous investment tips.
Spending money is a skill that naturally comes to many of us, managing it seems like a mammoth task let alone understanding the innumerable investment options available. If you have been breaking your head to get started with investments and have found yourself confused, we have Twinkle Jain, CA and financial content creator simplifying it for you.
Importance of saving and investing
Although it has been stressed enough just how important it is for everyone to save money, the young often chooses to ignore it. Jain says, “Saving is crucial for Gen Z and people in their 20s because it helps create financial security and prepares them for future goals like buying a home, travelling, or starting a business.”
She adds, “Investing is vital for young adults as it offers the potential for higher returns and helps grow wealth over time, making it easier to achieve long-term financial goals like early retirement or financial independence.”
Starting to invest early allows Gen Z and people in their 20s to take advantage of compounding, which means their money can grow significantly over time due to the power of reinvesting profits. The earlier you start, the more you compound.
The right age to start investing is in your early 20s as soon as you have a stable income and have set aside an emergency fund.
The appropriate way to breakdown your salary
Jain says it is important to break down your salary and allocate specific amounts for specific purposes. “Budgeting is essential. Allocate a portion of your salary for saving and investing (around 20-30%), prioritise essential expenses and limit discretionary spending. Use apps or tools to track expenses and stay within your budget”
The CA lists some easy and safe investment options:
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