Build Your Wealth in Your 20s

The popular saving strategy is to set aside at least 20% of your income for long-term savings. However, if you do start early, you can save as little as 5% and work your way up to 20% when you have more income to stash away.

The power of compound interest is that even small investments can really grow given enough time. Automate your monthly savings so that you don’t miss making regular deposits. 

What about your yearly bonuses? Set aside some for rainy days in a fixed deposit account or other low risk investments. The idea is not let your savings sit idle, but find ways to multiply your money through low-risk investment products.

Creating a budget is empowering as it drives home the importance of understanding where every ringgit goes.

To start, track your expenses as this helps you realise patterns in your spending habits. Once you have gotten some insights on where you spend the most, you can then find ways to cut/add/make changes to your monthly budget and make the most of your money. 

It sounds simple but as it is with exercising, it can be hard to consistently stick to a budget. Aim to manage your budget monthly and you will benefit from it tremendously no matter what your income is. 

Think ahead and set timelines for your personal goals. For example:

• Open an investment account 
• Set a 5 or 10-year net worth target (like RM100,000) 
   

Creating milestones provide a sense of purpose and motivation to reach your future financial goals.  

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.