Ravi, a young professional from Hyderabad, spent heavily on gadgets, dining out, and vacations after his first job. By 28, he faced ₹3 lakhs in credit card debt without savings.
Fact: Despite increased awareness, India’s health protection gap remains at 73%, leaving over 40 crore people without health insurance, which accounts for more than 31% of the population.
Your 20s and 30s shape your financial future. Here are 10 common money mistakes to avoid.
1. Not Building an Emergency Fund
For example, Priya spends ₹25,000 monthly and has no savings. When she faces a ₹50,000 medical emergency, she borrows money at 15% interest, paying ₹57,500 later.
Saving ₹75,000–₹1,50,000 (3–6 months’ expenses) could have avoided borrowing. Emergency funds protect against surprises and prevent costly loans.
Tip: Start saving for emergencies.
2. Overspending on Lifestyle
For example, Rahul earns ₹ 30,000 monthly and spends ₹ 6,000 on dining out. If he saved ₹ 6,000 monthly, he’d have ₹ 3.6 lakhs in 5 years.
Spending on luxuries instead of saving can delay financial goals. Small savings add up over time.
Tip: Make a budget, prioritize savings, and spend wisely.
3. Ignoring Retirement Savings
For example, Meera starts saving ₹1,000 monthly at 25. With a 10% annual return, she has ₹12 lakhs by 60. If she starts at 35, she’d have only ₹4.4 lakhs.
Starting early lets your savings grow more through compound interest over time.
Tip: Begin with ₹500 monthly and increase savings as income rises.
4. Getting into Credit Card Debt
Example: Arjun spends₹50,000 on his credit card but pays only₹5,000 monthly. With a 36% annual interest rate, he ends up paying₹18,000 extra in interest within a year.
Carrying a balance leads to high interest, making purchases costlier over time.
Tip: Pay the full amount each month and avoid unnecessary credit card usage.
Fact: The average credit card interest rate in India is 36% annually.
5. Not Learning About Personal Finance
For Example: Sanjay earns ₹40,000 but spends ₹45,000 monthly due to poor budgeting, leading to ₹60,000 debt annually.
Learning personal finance helps manage expenses and avoid debt.
Tip: Read “Rich Dad, Poor Dad” or watch YouTube for budgeting basics.
6. Taking personal loans for non-essential expenses
For example, Rina takes a ₹1 lakh personal loan for a vacation. If she saved ₹5,000 monthly, she could have gone on the trip in 20 months without borrowing.
Loans for non-essential items like vacations increase debt. It’s better to save for such expenses.
Tip: Take loans only for important needs like education or healthcare.
7. Not Setting Financial Goals
For example, Rahul wants to buy a car worth ₹3 lakhs in 3 years. To reach this goal, he saves ₹8,333 every month.
Without clear goals, it’s easy to overspend. Setting specific savings targets helps keep you on track.
Tip: Set SMART goals like saving ₹3 lakhs in 3 years for a car.
8. Skipping Health Insurance
For example, Aman avoids health insurance, thinking he’s healthy. After a sudden accident, his hospital bill is ₹75,000, draining his savings.
Medical emergencies can be costly. Without insurance, you risk your savings being wiped out.
Tip: Invest in a good health insurance policy to protect your savings.
9. Missing Out on Investments
For Example: ₹1 lakh in a savings account earns only ₹3,000 a year (3% interest). But investing in mutual funds can earn ₹12,000 a year (12% return).
Keeping all your money in a savings account limits its growth.
Tip: Start small with mutual funds or stocks. Diversify your investments to reduce risk.
10. Delaying Loan Repayments
For example, If you delay paying a ₹ 1 lakh loan with 12% interest, you’ll owe ₹ 12,000 extra in a year.
Delaying repayments increases the interest you owe.
Tip: Pay off high-interest loans first and always pay on time.
Table: Common Money Mistakes and Solutions
| Mistake | Impact | Solution |
| No Emergency Fund | Borrowing at high interest rates | Save 3–6 months’ expenses |
| Overspending | Little or no savings | Create a budget; save first. |
| Ignoring Retirement Savings | Missed wealth growth | Start saving early. |
| Credit Card Debt | High-interest payments | Pay the full balance monthly. |
| No Health Insurance | Drained savings in emergencies | Get a health plan |
Conclusions: Learn From Mistakes
Ravi’s story shows that small steps today can lead to a secure future. If he had set goals, avoided unnecessary loans, and invested, his situation would be better.
Start with an emergency fund, budget, and financial education. If taking a personal loan in Hyderabad, ensure it’s for essential needs with a repayment plan.