Effective Living: Beginner’s Guide to Managing Personal Finance in Your 20s

Tuesday, May 27, 2025

Beginner’s Guide to Managing Personal Finance in Your 20s

Your 20s are a powerful time to build strong financial habits. You may just be starting your career, paying off student debt, or figuring out how to budget—but the earlier you start managing your money wisely, the better your future will look.
‎Here’s a simple, no-fluff guide to get your personal finances under control—even if you're starting from zero.
‎1. Track Every Expense
‎Before you can manage your money, you need to know where it's going. Start by tracking every rupiah you spend for one month. Use apps like:
‎Money Lover
Spendee
‎Excel/Google Sheets
‎Why it matters:
‎Awareness is the first step to control. Most people underestimate how much they spend, especially on small purchases.
‎2. Build a Budget with the 50/30/20 Rule
‎A budget doesn’t mean you stop spending—it just means you plan it. Try this simple formula:
‎50% for Needs (rent, food, bills)
‎30% for Wants (dining out, entertainment)
‎20% for Savings or Debt Payments
‎Tip: Start with rough numbers. It’s okay to adjust as you go.
‎3. Start an Emergency Fund
‎Life happens. Medical bills, job loss, or unexpected travel can hit anytime. Your emergency fund is your financial airbag.
‎Goal: Save 3 to 6 months’ worth of expenses.
‎Start small: Even saving Rp100.000 per week adds up over time.
‎Where to keep it: Use a high-interest savings account, separate from your daily bank account.
‎4. Avoid Bad Debt
‎Not all debt is evil. But some will trap you:
‎Good debt: Education, business investment, affordable home loan
‎Bad debt: Credit card debt, payday loans, impulsive spending
‎Rule of thumb: If you can't pay for it in full soon, or it doesn’t grow your value—rethink Spend

‎5. Start Investing Early
‎The best time to invest was yesterday. The second-best time is today. Compound interest works like magic over time.
‎How to start:
‎Learn the basics: stocks, bonds, mutual funds (Reksa Dana)
‎Use beginner-friendly platforms like Bibit or Ajaib
‎Don’t wait to “have more money”—start small and build consistency
‎6. Set Clear Financial Goals
‎What do you want your money to do for you?
‎Travel fund in 1 year?
‎Buy a motorbike in 2 years?
‎Down payment for a house in 5?
‎Set clear goals, break them down, and give them a timeline. This makes saving more exciting and motivating.
‎7. Keep Learning About Money
‎Financial literacy isn’t taught in most schools, but it’s one of the most important skills in life. Read books, follow finance blogs, watch videos, and learn bit by bit.
‎Recommended Books:
‎The Psychology of Money – Morgan Housel
‎Rich Dad Poor Dad – Robert Kiyosaki
‎I Will Teach You To Be Rich – Ramit Sethi
‎Final Thoughts
‎Managing money isn’t about how much you make—it’s about how you handle it. Start small. Be consistent. Your future self will thank you.

Once you’ve got the basics down, build safety with an Emergency Fund.

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